Adjustment Costs and Endless Capital Growth
This work examines the effects on investment theory of introducing learning by doing externalities in adjustment costs. The analysis shows that the long run equilibrium of the economy, which was represented in the traditional formulation by a steady state, becomes, in this new framework, a balanced growth path where capital and investment grow at the same constant rate. It is shown that this result is due to the fact that, while in the traditional model the marginal opportunity cost of capital replacement is increasing in the capital stock, in this new context it is constant.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" 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.
|Date of creation:||2001|
|Date of revision:|
|Publication status:||Published in RISEC:International Review of Economics and Business, June 2003, v. 50, iss. 2, pp. 211-20|
|Contact details of provider:|| Postal: |
Web page: http://economia.unipr.it/de
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:par:dipeco:2001-ep03. 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: (Andrea Lasagni)
If references are entirely missing, you can add them using this form.