Capital Utilization, Maintenance Costs and the Business Cycle
AbstractIn this paper, we analyze the role played by capacity utilization and maintenance costs in the propagation of aggregate fluctuations. To this purpose we use an extension of the general equilibrium stochastic growth model that incorporates a depreciation technology depending upon both capital utilization and maintenance costs. In addition, we argue that maintenance activity must be countercyclical, because it is cheaper for the firm to repair and maintain machines when they are stopped than when they are being used. We show that the propatation mechanism associated with our technology assumption is quantitatively important: the countercyclicality of maintenance costs contributes significantly to the magnification and persistence of technology shocks.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by ENSAE in its journal Annals of Economics and Statistics.
Volume (Year): (2000)
Issue (Month): 58 ()
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Dueker, Michael J. & Fischer, Andreas M., 2003.
"Fixing Swiss potholes: The importance and cyclical nature of improvements,"
Elsevier, vol. 79(3), pages 409-415, June.
- Michael Dueker & Andreas Fischer, 2003. "Fixing Swiss Potholes: The Importance and Cyclical Nature of Improvements," Working Papers 03.01, Swiss National Bank, Study Center Gerzensee.
- Martial Dupaigne, 2007. "Les variations choisies de l'utilisation du capital : une revue des implications macroéconomiques," Revue d'économie politique, Dalloz, vol. 0(2), pages 161-196.
- Bitros, George C., 2009. "The Theorem of Proportionality in Mainstream Capital Theory: An Assessment of its Conceptual Foundations," MPRA Paper 17436, University Library of Munich, Germany.
- Raouf, BOUCEKKINE & Blanca, MARTINEZ & Cagri, SAGLAM, 2006.
"Capital Maintenance Vs Technology Adopton under Embodied Technical Progress,"
Discussion Papers (ECON - DÃ©partement des Sciences Economiques)
2006030, Université catholique de Louvain, Département des Sciences Economiques.
- BOUCEKKINE, Raouf & MARTINEZ, Blanca & SAGLAM, Cagri, 2006. "Capital maintenance Vs technology adoption under embodied technical progress," CORE Discussion Papers 2006058, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Dittmar, Robert & Dueker, Michael & Fischer, Andreas M, 2002.
"Stochastic Capital Depreciation and the Comovement of Hours and Productivity,"
CEPR Discussion Papers
3192, C.E.P.R. Discussion Papers.
- Dueker Michael & Fischer Andreas & Dittmar Robert, 2007. "Stochastic Capital Depreciation and the Co-movement of Hours and Productivity," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(3), pages 1-24, January.
- Michael Dueker & Andreas Fischer & Robert D. Dittmar, 2002. "Stochastic Capital Depreciation and the Comovement of Hours and Productivity," Working Papers 02.01, Swiss National Bank, Study Center Gerzensee.
- Fischer, Andreas & Michael J Dueker & Robert D Dittmar, 2003. "Stochastic Capital Depreciation and the Comovement of Hours and Productivity," Royal Economic Society Annual Conference 2003 80, Royal Economic Society.
- Michael J. Dueker & Andreas M. Fischer & Robert D. Dittmar, 2004. "Stochastic capital depreciation and the comovement of hours and productivity," Working Papers 2002-003, Federal Reserve Bank of St. Louis.
- Beatriz Rumbos & Leonardo Auernheimer, 2001. "Endogenous capital utilization in a neoclassical growth model," Atlantic Economic Journal, International Atlantic Economic Society, vol. 29(2), pages 121-134, June.
- Omar Licandro & Luis A. Puch & J. Ramón Ruiz Tamaritz, 2001.
"Optimal Growth under Endogeneous Depreciation, Capital Utilization and Maintenance Costs,"
Documentos del Instituto Complutense de AnÃ¡lisis EconÃ³mico
0101, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales.
- Omar Licandro & Luis A. Puch & J. Ramón Ruiz-Tamarit, 2001. "Optimal growth under endogenous depreciation, capital utilization and maintenance costs," Investigaciones Economicas, Fundación SEPI, vol. 25(3), pages 543-559, September.
- Albonico, Alice & Kalyvitis, Sarantis & Pappa, Evi, 2014.
"Capital maintenance and depreciation over the business cycle,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 39(C), pages 273-286.
- Alice Albonico & Sarantis Kalyvitis & Evi Pappa, . "Capital Maintenance and Depreciation over the Business Cycle," DEOS Working Papers 1326, Athens University of Economics and Business.
- Raouf Boucekkine & Blanca Martínez & CARGI SAGLAM, 2003.
"Technology Adoption, Capital Maintenance And The Technological Gap,"
Working Papers. Serie AD
2003-18, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Raouf BOUCEKKINE & Blanca MARTINEZ & Cagri SAGLAM, 2001. "Technology Adoption, Capital Maintenance and the Technological Gap," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001033, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Alice Albonico & Sarantis Kalyvitis & Evi Pappa, 2011. "Real Business Cycles with Capital Maintenance," Quaderni di Dipartimento 147, University of Pavia, Department of Economics and Quantitative Methods.
- George Bitros & Elias Flytzanis, 2004. "Utilization and Maintenance in a Model with Terminal Scrapping," Macroeconomics 0411016, EconWPA.
- Bitros, George C. & Flytzanis, Elias, 2009. "Utilization and maintenance in a model with scrapping," European Journal of Operational Research, Elsevier, vol. 194(2), pages 551-573, April.
- George Bitros, 2010. "The theorem of proportionality in contemporary capital theory: An assessment of its conceptual foundations," The Review of Austrian Economics, Springer, vol. 23(4), pages 367-401, December.
- Michael J. Dueker & Andreas M. Fischer, 2003.
"Fixing Swiss potholes: the importance of improvements,"
2001-025, Federal Reserve Bank of St. Louis.
- Dueker, Michael & Fischer, Andreas M, 2002. "Fixing Swiss Potholes: The Importance of Improvements," CEPR Discussion Papers 3159, C.E.P.R. Discussion Papers.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Robert Gary-Bobo).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.