IDEAS home Printed from
   My bibliography  Save this paper

Endogeneous Depreciation in a Putty-Putty Production Model


  • Escriba Perez, F. Javier

    (Universitat de València)

  • Ruiz Tamarit, J. Ramon

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)


The theory of investment has shown the existence of a well defined investment function combining both the tradition of Tobin’s q models and the adjustment costs related to investment. Nevertheless, depreciation is still determined exogenously as a constant proportion of capital stock. In this paper we analyse conditions for a well defined depreciation function. Introducing a maintenance cost function for capital in the firm’s behavior model, depreciation appears as a control variable endogenously determined by the firm.

Suggested Citation

  • Escriba Perez, F. Javier & Ruiz Tamarit, J. Ramon, 1994. "Endogeneous Depreciation in a Putty-Putty Production Model," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1994023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:1994023

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Roth, Alvin E, 1985. "A Note on Risk Aversion in a Perfect Equilibrium Model of Bargaining," Econometrica, Econometric Society, vol. 53(1), pages 207-211, January.
    3. Peter C. B. Phillips & Bruce E. Hansen, 1990. "Statistical Inference in Instrumental Variables Regression with I(1) Processes," Review of Economic Studies, Oxford University Press, vol. 57(1), pages 99-125.
    4. repec:bla:restud:v:57:y:1990:i:1:p:99-125 is not listed on IDEAS
    5. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    6. Urbain, Jean-Pierre, 1992. "On Weak Exogeneity in Error Correction Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(2), pages 187-207, May.
    7. Bogaert, H. & de Biolley, T. & Verlinden, J., 1991. "L'ajustement des salaires face aux chocs pétroliers et les réponses de la politique économique," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1991008, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    8. repec:fpb:wpaper:53 is not listed on IDEAS
    9. Hansen, Bruce E., 1992. "Efficient estimation and testing of cointegrating vectors in the presence of deterministic trends," Journal of Econometrics, Elsevier, vol. 53(1-3), pages 87-121.
    10. Alogoskoufis, George & Manning, Alan, 1991. "Tests of alternative wage employment bargaining models with an application to the UK aggregate labour market," European Economic Review, Elsevier, vol. 35(1), pages 23-37, January.
    11. Dalmazzo, Alberto, 1992. "Outside options in a bargaining model with decay in the size of the cake," Economics Letters, Elsevier, vol. 40(4), pages 417-421, December.
    12. Stephen Nickell & Sushil Wadhwani, 1991. "Employment Determination in British Industry: Investigations Using Micro-Data," Review of Economic Studies, Oxford University Press, vol. 58(5), pages 955-969.
    13. Manning, Alan, 1987. "An Integration of Trade Union Models in a Sequential Bargaining Framework," Economic Journal, Royal Economic Society, vol. 97(385), pages 121-139, March.
    14. Phillips, Peter C B & Ouliaris, S, 1990. "Asymptotic Properties of Residual Based Tests for Cointegration," Econometrica, Econometric Society, vol. 58(1), pages 165-193, January.
    15. Dolado, Juan J & Jenkinson, Tim & Sosvilla-Rivero, Simon, 1990. " Cointegration and Unit Roots," Journal of Economic Surveys, Wiley Blackwell, vol. 4(3), pages 249-273.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ctl:louvir:1994023. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anne DAVISTER-LOGIST). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.