Creative Destruction, Investment Volatility, and the Average Age of Capital

Raouf Boucekkine (), Marc Germain, Omar Licandro () and Alphonse Magnus

Journal of Economic Growth, 1998, vol. 3, issue 4, 84 pages

Abstract: In this article, a new numerical procedure is used to compute the equilibrium of a vintage capital growth model with nonlinear utility, where the scrapping time is nonconstant. We show that equilibrium investment and output converge nonmonotonically to the balanced growth path due to replacement echoes. We find that the average age of capital is inversely related to output, which is consistent with recent micro evidence reinforcing the importance of the embodied question. We also find that an unanticipated permanent increase in the rate of embodied technological progress causes labor productivity to slowdown in the short run. Copyright 1998 by Kluwer Academic Publishers

Date: 1998
References: Add references at CitEc
Citations: View citations in EconPapers (84)

Downloads: (external link)
http://journals.kluweronline.com/issn/1381-4338/contents link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Creative destruction, investment volatility, and the average age of capital (1998)
Working Paper: Creative destruction, investment volatility, and the average age of capital
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:kap:jecgro:v:3:y:1998:i:4:p:361-84

Ordering information: This journal article can be ordered from
http://www.springer. ... th/journal/10887/PS2

Access Statistics for this article

Journal of Economic Growth is currently edited by Oded Galor

More articles in Journal of Economic Growth from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().