Growth, Capital Scrapping, and the Rate of Capacity Utilisation
AbstractThe aim of this short article is to build a model in order to take into account capital scrapping (or bankruptcies) in an income distribution and growth model. The reason to introduce capital scrapping results from the intuition of some inconsistencies between theoretical predictions and empirical facts: the rate of capacity utilisation data often exhibit a greater stability than it is expected after reading theoretical models. We think that capital scrapping might contribute to stabilise the utilisation rate. The idea is as follows: an increase of the profit share implies a decrease of the rate of capacity utilisation which then involves a rise in capital scrapping (or in the rate of bankruptcies).
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Bibliographic InfoPaper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-00355932.
Date of creation: 01 Nov 2008
Date of revision:
Publication status: Published - Presented, 12th Workshop on the Research Network "Macroeconomic Policies", 2008, Berlin, Germany
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Income distribution ; Capital scrapping ; Rate of Capacity Utilisation ; Imperfect Competition ; Growth;
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