THE REPLACEMENT-PROBLEM

Authors
COOLEY TF GREENWOOD J YORUKOGLU M
Citation
Tf. Cooley et al., THE REPLACEMENT-PROBLEM, Journal of monetary economics, 40(3), 1997, pp. 457-499
Citations number
34
Journal title
Journal of monetary economics → ACNP
ISSN journal
03043932
Volume
40
Issue
3
Year of publication
1997
Pages
457 - 499
Database
ISI
SICI code
0304-3932(1997)40:3<457:>2.0.ZU;2-R
Abstract
A prototypical vintage capital model of economic growth is developed, where the decision to replace old technologies with new ones is modele d explicitly. Technological change is investment specific. Depreciatio n in this environment is an economic, not a physical, concept. The vin tage capital economy's balanced-growth paths and transitional dynamics are analyzed, The transitional dynamics are markedly different from t he standard neoclassical growth model. (C) 1997 Elsevier Science B.V. All rights reserved.