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Vintage Capital Growth Theory: Three Breakthroughs

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  • Raouf Boucekkine
  • David de la Croix and Omar Licandro

Abstract

Vintage capital growth models have been at the heart of growth theory in the 60s. This research line collapsed in the late 60s with the so-called embodiment controversy and the technical sophistication of the vintage models. This paper analyzes the astonishing revival of this literature in the 90s. In particular, it out- lines three methodological breakthroughs explaining this resurgence: a growth accounting revolution, taking advantage of the availability of new time series, an optimal control revolution allowing to safely study vintage capital optimal growth models, and a vintage human capital revolution, along with the rise of economic demography, accounting for the vintage structure of human capital similarly to physical capital age structuring. The related literature is surveyed.

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Bibliographic Info

Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 565.

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Date of creation: Jun 2011
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Handle: RePEc:bge:wpaper:565

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Keywords: Vintage capital; embodied technical progress; growth accounting; optimal control; endogenous growth; vintage human capital; demography;

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References

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  1. Raouf Boucekkine & David de la Croix & Omar Licandro, 2003. "Early Mortality Declines at the Dawn of Modern Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(3), pages 401-418, 09.
  2. Mark Doms & Timothy Dunne, 1994. "Capital Adjustment Patterns in Manufacturing Plants," Working Papers 94-11, Center for Economic Studies, U.S. Census Bureau.
  3. Boucekkine, Raouf & Licandro, Omar & Puch, Luis A. & del Rio, Fernando, 2005. "Vintage capital and the dynamics of the AK model," Journal of Economic Theory, Elsevier, vol. 120(1), pages 39-72, January.
  4. BOUCEKKINE, Raouf & GERMAIN, Marc & LICANDRO, Omar & MAGNUS, Alphonse, . "Creative destruction, investment volatility, and the average age of capital," CORE Discussion Papers RP -1376, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  8. Galor, Oded & Weil, David, 1999. "From Malthusian Stagnation to Modern Growth," CEPR Discussion Papers 2082, C.E.P.R. Discussion Papers.
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  11. Michael Gort & Jeremy Greenwood & Peter Rupert, 1998. "Measuring the rate of technological progress in structures," Working Paper 9806, Federal Reserve Bank of Cleveland.
  12. Raouf Boucekkine & David de la Croix & Omar Licandro, . "vintage human capital, demographic trends and endogenous growth," Working Papers 2000-02, FEDEA.
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  21. BOUCEKKINE, Raouf & del RIO, Fernando & LICANDRO, Omar, 2002. "Obsolescence and modernization in the growth process," CORE Discussion Papers 2002067, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  22. BOUCEKKINE, RAOUF & de la CROIX, David & LICANDRO, Omar, 2004. "Modelling vintage structures with DDEs : principles and applications," CORE Discussion Papers 2004047, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  23. David de la Croix & Thomas Lindh & Bo Malmberg, 2008. "Swedish economic growth and education since 1800," Canadian Journal of Economics, Canadian Economics Association, vol. 41(1), pages 166-185, February.
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  26. David de la Croix & Omar Licandro, . "Life expectancy and endogenous growth," Working Papers 97-23, FEDEA.
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Cited by:
  1. Schröder, Philipp J.H. & Sørensen, Allan, 2012. "Firm exit, technological progress and trade," European Economic Review, Elsevier, vol. 56(3), pages 579-591.

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