"d" Along the Business Cycle

Fabrice Collard () and T. Kollintzas

Athens University of Economics and Business from Athens University of Economics and Business, Department of International and European Economic Studies

Abstract: In this paper we look at the behavior of physical depreciation over the business cycle. We do so within the context of a real business cycle model where the decisions of firms about physical capital utilization, maintenance, improvement and scrapping are endogenous. The model encompasses the baseline real business cycle model, where the depreciation rate (d) is fixed. It also encompasses a version of the GReenwood, Hercowitz and Huffman (1988) model of endogenous physical capital utilization, while it shares features with the Burnside, Eichenbaum and Rebelo (1993) variable work effort model.

Keywords: BUSINESS CYCLES; CAPITAL (search for similar items in EconPapers)
JEL-codes: E32 E22 (search for similar items in EconPapers)
Date: 1998

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