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Technological innovations, economic renovation, and anticipation effects


  • Hritonenko, Natali
  • Yatsenko, Yuri


Optimal replacement of a firm's capital is described in the framework of Solow-type vintage capital models. The firm controls the investment into new capital and scrapping of obsolete capital. The embodied technological change involves a continuous component and technological innovations (breakthroughs, technology shocks). The provided analytic and numeric investigation reveals the qualitative structure of optimal regimes. It demonstrates that the optimal investment is zero immediately before and after a technological breakthrough (direct anticipation effect) and contains a set of zero-investment boundary intervals (anticipation echoes) before the breakthrough time. The optimal capital lifetime oscillates around an interior balanced growth trajectory before and switches to a new balanced trajectory after the breakthrough.

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  • Hritonenko, Natali & Yatsenko, Yuri, 2010. "Technological innovations, economic renovation, and anticipation effects," Journal of Mathematical Economics, Elsevier, vol. 46(6), pages 1064-1078, November.
  • Handle: RePEc:eee:mateco:v:46:y:2010:i:6:p:1064-1078

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    References listed on IDEAS

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    Cited by:

    1. Raouf Boucekkine & Natali Hritonenko & Yuri Yatsenko, 2013. "Health, Work Intensity, and Technological Innovations," AMSE Working Papers 1320, Aix-Marseille School of Economics, Marseille, France, revised Mar 2013.
    2. Hritonenko, Natali & Yatsenko, Yuri, 2012. "Energy substitutability and modernization of energy-consuming technologies," Energy Economics, Elsevier, vol. 34(5), pages 1548-1556.
    3. HRITONENKO, Natali & YATSENKO, Yuri, 2011. "Sustainable growth and modernization under environmental hazard and adaptation," CORE Discussion Papers 2011025, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Raouf Boucekkine & Natali Hritonenko & Yuri Yatsenko, 2011. "Sustainable growth under pollution quotas: optimal R&D, investment and replacement policies," Working Papers halshs-00632887, HAL.


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