Obsolescence and productivity

Fernando Rio () and Antonio Sampayo

Portuguese Economic Journal, 2014, vol. 13, issue 3, 195-216

Abstract: The increase in the obsolescence of intangible capital caused by the adoption of new information technologies can play an important role in accounting for the productivity slowdown undergone by the US economy since 1974. To explore this hypothesis, we have developed a standard growth model with physical and intangible capital in which technical progress is equipment–specific. We assume that the obsolescence of intangible capital increases when the equipment–specific technical progress accelerates. The model is calibrated for the period 1957–1973 and the response of the economy to an increase in the rate of equipment–specific technical progress — as observed since 1974 — is simulated. We show that this setup can account for a large part of the post–1974 slowdown observed in productivity and in the Solow residual. Copyright ISEG 2014

Keywords: Obsolescence; Intangible capital; Equipment–specific technical progress; Productivity slowdown; E23; O30; O47 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10258-014-0106-6 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Obsolescence and Productivity
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:spr:portec:v:13:y:2014:i:3:p:195-216

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10258/PS2

DOI: 10.1007/s10258-014-0106-6

Access Statistics for this article

Portuguese Economic Journal is currently edited by Luís F. Costa

More articles in Portuguese Economic Journal from Springer, Instituto Superior de Economia e Gestao
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().