Business Formation and Aggregate Investment

Christian Keuschnigg

German Economic Review, 2001, vol. 2, issue 1, 31-55

Abstract: The paper proposes an intertemporal equilibrium model of vintage capital and monopolistic competition. Reflecting a tradeoff between the number and capacity of new machines, investment may be extensive or intensive. External gains from specialization and rationalization result in distorted investment decisions. The paper compares the effectiveness of a general investment tax credit with a start-up subsidy that shifts the direction of investment towards a more extensive form. An optimal policy of investment promotion is derived.

Date: 2001
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://doi.org/10.1111/1468-0475.00026 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Journal Article: Business Formation and Aggregate Investment (2001)
Working Paper: Business Formation and Aggregate Investment (1996)
Working Paper: Business Formation and Aggregate Investment (1995)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:germec:v:2:y:2001:i:1:p:31-55

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/ger/html

DOI: 10.1111/1468-0475.00026

Access Statistics for this article

German Economic Review is currently edited by Peter Egger, Almut Balleer, Jesus Crespo-Cuaresma, Mario Larch, Aderonke Osikominu and Georg Wamser

More articles in German Economic Review from De Gruyter
Bibliographic data for series maintained by Peter Golla ().