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Vintage Capital Growth Theory: Three Breakthroughs

  • Raouf Boucekkine
  • David De la Croix
  • Omar Licandro

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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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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