In order to evaluate the performance of the Plan Prever (a scrapping scheme introduced by the Spanish government in 1997), we propose a model of car replacement. It is based in the recent literature on investment goods replacement and allows for a quantitative evaluation of the effects on car's...

This paper examines how a scrappage subsidy affects the lifetime of durable goods when secondhand markets are present. To this end, we propose a vintage model to analyze the replacement decision in an economy in which high and low income agents trade on a durable good. Thus, the existence of a...

In this paper we argue that the increase in the obsolescence costs caused by the adoption of new information technologies, can play an important role in accounting for the productivity slowdown undergone by the US economy after 1974. We develop a standard growth model with physical and...