Endogenous vs exogenously driven fluctuations in vintage capital models

Raouf Boucekkine (raouf.boucekkine@univ-amu.fr), Fernando del Río and Omar Licandro (licandro.omar@gmail.com)

CEPREMAP Working Papers (Couverture Orange) from CEPREMAP

Abstract: In this paper, we present a simple vintage capital growth model in which both exogenous and endogenous fluctuations sources are present. Indeed, it can be seen as a particular case of Caballero and Hammour (1996)'s creative destruction model, with advantage that analytical characterization of the short run and asymptotic dynamics is partially allowed. In particular, we show that job creation follows a delayed-differential equation with periodic coefficients. The delay is equal to the optimal age of capital goods, and can be taken as a measureof the periodicity of the endogenous replacement echoes inherent to vintage models. The period of the coefficients is equal to the period of an exogenous profitability cycle. We mathematically show that job creation is asymptotically periodic, with the same period as the profitability cycle. Furthermore using an explicit numerical method, we find that replacement echoes generally dominate the short run dynamics. Finally, we find that the combination of the two fluctuations sources favors the appearance of asymmetries in job creation and job destruction patterns.

JEL-codes: C63 E22 E32 O40 (search for similar items in EconPapers)
Pages: 26 pages
Date: 1999
New Economics Papers: this item is included in nep-dge, nep-pke and nep-tid
References: Add references at CitEc
Citations: View citations in EconPapers (45)

Downloads: (external link)
http://www.cepremap.fr/depot/couv_orange/co9901.ps (application/postscript)
http://www.cepremap.fr/depot/couv_orange/co9901.pdf (application/pdf)

Related works:
Journal Article: Endogenous vs Exogenously Driven Fluctuations in Vintage Capital Models (1999)
Working Paper: Endogenous vs Exogenously Driven Fluctuations in Vintage Capital Models (1999)
Working Paper: Endogenous vs Exogenously Driven Fluctuations in Vintage Capital Models
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:cpm:cepmap:9901

Access Statistics for this paper

More papers in CEPREMAP Working Papers (Couverture Orange) from CEPREMAP Contact information at EDIRC.
Bibliographic data for series maintained by Sébastien Villemot (sebastien.villemot@ens.psl.eu).