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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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  1. Raouf Boucekkine & David De La Croix & Omar Licandro, 2004. "MODELLING VINTAGE STRUCTURES WITH DDEs: PRINCIPLES AND APPLICATIONS," Mathematical Population Studies, Taylor and Francis Journals, vol. 11(3-4), pages 151-179.
  2. Boucekkine, R. & Fabbri, G. & Gozzi, F., 2010. "Maintenance and investment: Complements or substitutes? A reappraisal," Journal of Economic Dynamics and Control, Elsevier, vol. 34(12), pages 2420-2439, December.
  3. Raouf BOUCEKKINE & Fernando DEL RIO & Omar LICANDRO, 2002. "Embodied technological change learning-by-doing and the productivity slowdown," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2002028, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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  7. BOUCEKKINE, Raouf & DE LA CROIX, David & PEETERS, Dominique, 2005. "Early literacy achievements, population density and the transition to modern growth," CORE Discussion Papers 2005026, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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