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Endogenous Growth Theory in a Vintage Capital Model

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  • Bardhan, Pranab
  • Priale, Rodrigo

Abstract

This is a model of quality ladder of machines in an endogenous growth context, when some machines are scrapped while others coexist with the latest variety, with the economic life of machines endogenously determined as in old vintage-capital models. Policies that affect this economic life of machines (for example, those influencing the gross savings or investment rate, or trade policy in a two-sector open economy) will have an effect on the long-run growth rate.
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Suggested Citation

  • Bardhan, Pranab & Priale, Rodrigo, 1996. "Endogenous Growth Theory in a Vintage Capital Model," Department of Economics, Working Paper Series qt1363t4jg, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    • Handle: RePEc:cdl:econwp:qt1363t4jg
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    1. Boucekkine, Raouf & Germain, Marc & Licandro, Omar, 1997. "Replacement Echoes in the Vintage Capital Growth Model," Journal of Economic Theory, Elsevier, vol. 74(2), pages 333-348, June.
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    10. R. M. Solow & J. Tobin & C. C. Weizsäcker & M. Yaari, 1971. "Neoclassical Growth with Fixed Factor Proportions," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 9, pages 68-102, Palgrave Macmillan.
    11. Chari, V V & Hopenhayn, Hugo, 1991. "Vintage Human Capital, Growth, and the Diffusion of New Technology," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1142-1165, December.
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    Cited by:

    1. Boucekkine, Raouf & del Rio, Fernando & Licandro, Omar, 2005. "Obsolescence and modernization in the growth process," Journal of Development Economics, Elsevier, vol. 77(1), pages 153-171, June.
    2. Frankel, J-A & Rose, A-K, 1996. "Economic Structure and the Decision to Adopt a Common Currency," Papers 611, Stockholm - International Economic Studies.
    3. Maurice Obstfeld, 1989. "Dynamic Seigniorage Theory: An Exploration," NBER Working Papers 2869, National Bureau of Economic Research, Inc.
    4. Hsieh, Chang-Tai, 2001. "Endogenous growth and obsolescence," Journal of Development Economics, Elsevier, vol. 66(1), pages 153-171, October.
    5. Peter Funk, 2005. "Competition and Growth in a Vintage Knowledge Model," Working Paper Series in Economics 15, University of Cologne, Department of Economics.
    6. Funk, Peter, 2008. "Entry and growth in a perfectly competitive vintage model," Journal of Economic Theory, Elsevier, vol. 138(1), pages 211-236, January.

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