Limits to growth and creative destruction in the framework of a vintage capital model

Limites à la croissance et destruction créatrice dans le cadre d'un modèle à générations de capital

Marc Germain ()
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Marc Germain: LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper studies the path of a resource-constrained economy in an original vintage capital growth model involving a Schumpeterian process of creative destruction. The path of the economy is characterized by three successive phases: (i) unsustainable « high » growth; (ii) after a peak, a deep and brutal decline; (iii) slower growth gradually leading to equilibrium. The slowdown and reversal of the economy are linked to the continuous rise in the extraction rate of the resource, which occurs despite technical progress due to the creative destruction process. This process also has a non-monotonic trajectory, in particular its destruction component, one of the factors behind the economic obsolescence of equipment. The latter evolves in the opposite direction to production, in contradiction with the widespread assumption of a constant capital depreciation rate.

Keywords: limites à la croissance; destruction créatrice; obsolescence; générations de capital (search for similar items in EconPapers)
Date: 2022-11-12
New Economics Papers: this item is included in nep-gro
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