Endogenous Growth, Capital Utilization and Depreciation
We study an extended version of the one-sector AK growth model introducing adjustment and maintenance costs. Agents are allowed to under-use the installed capital and to vary the depreciation rate. The model is analyzed using particular functional forms and is solved in closed-form. We find that adjustment and maintenance costs (e?- ciency) reduce (increases) investment, depreciation, capital utilization and the rate of growth; impatience reduces the rate of growth but increases depreciation and utilization, which are also negatively related to the rate of population growth; the rate of growth appears positively correlated with the depreciation rate and the rate of capital utilization.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Omar Licandro & Luis A. Puch González & J. Ramón Ruiz Tamaritz, 2001.
"Optimal Growth under Endogeneous Depreciation, Capital Utilization and Maintenance Costs,"
Documentos de Trabajo del ICAE
0101, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
- Omar Licandro & Luis A. Puch & J. Ramón Ruiz-Tamarit, 2001. "Optimal growth under endogenous depreciation, capital utilization and maintenance costs," Investigaciones Economicas, Fundación SEPI, vol. 25(3), pages 543-559, September.
- Omar Licandro & Luis A. Puch & J. Ramón Ruiz-Tamarit, . "Optimal Growth under Endogenous Depreciation, Capital Utilization and Maintenance Costs," Working Papers 2000-23, FEDEA.
- Stephen L. Parente & Edward C. Prescott, 1993. "Changes in the wealth of nations," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 3-16.
- Sergio Rebelo, 1999.
"Long Run Policy Analysis and Long Run Growth,"
Levine's Working Paper Archive
2114, David K. Levine.
- Ruiz-Tamarit, J.R. & Ventura-Marco, M., 2011.
"Solution to nonlinear MHDS arising from optimal growth problems,"
Mathematical Social Sciences,
Elsevier, vol. 61(2), pages 86-96, March.
- J. R. Ruiz-Tamarit & M. Ventura-Marco, . "Solution to Non-Linear MHDS arising from Optimal Growth Problems," Working Papers 2000-16, FEDEA.
- Abel, Andrew B & Blanchard, Olivier J, 1983.
"An Intertemporal Model of Saving and Investment,"
Econometric Society, vol. 51(3), pages 675-92, May.
- Burnside, Craig & Eichenbaum, Martin, 1996.
"Factor-Hoarding and the Propagation of Business-Cycle Shocks,"
American Economic Review,
American Economic Association, vol. 86(5), pages 1154-74, December.
- Craig Burnside & Martin Eichenbaum, 1994. "Factor Hoarding and the Propagation of Business Cycles Shocks," NBER Working Papers 4675, National Bureau of Economic Research, Inc.
- Epstein, L. & Denny, M., 1980. "Endogenous capital utilization in a short-run production model : Theory and an empiral application," Journal of Econometrics, Elsevier, vol. 12(2), pages 189-207, February.
- Sala-I-Martin, X. & Barro, R.J., 1991.
"Public Finance in Models of Economic Growth,"
640, Yale - Economic Growth Center.
- Barro, Robert J. & Sala-i-Martin, Xavier, 1992. "Public Finance in Models of Economic Growth," CEPR Discussion Papers 630, C.E.P.R. Discussion Papers.
- Robert J. Barro & Xavier Sala-i-Martin, 1990. "Public Finance in Models of Economic Growth," NBER Working Papers 3362, National Bureau of Economic Research, Inc.
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-37, October.
- Beatriz Rumbos & Leonardo Auernheimer, 2001. "Endogenous capital utilization in a neoclassical growth model," Atlantic Economic Journal, International Atlantic Economic Society, vol. 29(2), pages 121-134, June.
- BOUCEKKINE, Raouf & RUIZ-TAMARIT, Ramon, .
"Capital maintenance and investment: complements or substitutes?,"
CORE Discussion Papers RP
1630, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- BOUCEKKINE, Raouf & RUIZ-TAMARIT Ramon, 2001. "Capital Maintenance and Investment : Complements or Substitutes ?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001012, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- repec:adr:anecst:y:2000:i:58:p:06 is not listed on IDEAS
- Ellen R. McGrattan & James A. Schmitz, 1999. "Maintenance and repair: too big to ignore," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall, pages 2-13.
- Motahar, Eshragh, 1992. "Endogenous capital utilization and the q theory of investment," Economics Letters, Elsevier, vol. 40(1), pages 71-75, September.
When requesting a correction, please mention this item's handle: RePEc:fda:fdaddt:2004-21. 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: (Carmen Arias)
If references are entirely missing, you can add them using this form.