Vintage capital and the dynamics of the AK model
AbstractThis paper analyzes the equilibrium dynamics of an AK-type endogenous growth model with vingage capital. The inclusion of vintage capital leads to oscillatory dynamics governed by replacement echoes, which additionally influence the intercept of the balanced growth path. These features, which are in sharp contrast to those from the standard AK model, can contribute to explaining the short-run deviations observed between investment and growth rates time series. To characterize the convergence properties and the dynamics of the model we develop analytical and numerical methods that should be of interest for the general resolution of endogenous growth models with vintage capital.
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Endogenous growth; Vintage capital; AK model;
Find related papers by JEL classification:
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-02-21 (All new papers)
- NEP-DEV-2000-02-21 (Development)
- NEP-DGE-2000-02-21 (Dynamic General Equilibrium)
- NEP-TID-2000-02-21 (Technology & Industrial Dynamics)
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