Obsolescence and Modernization in the Growth Process

Raouf Boucekkine (), Fernando del Río and Omar Licandro ()

No 2002043, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: In this paper, an endogenous growth model is built up incorporating Schumpeterian growth and embodied technological progress. Under embodiment, long run growth is affected by the following effects : (i) obsolescence costs add to the user cost of capital, reducing the research effort; and (ii) the modernization of capital through investment raises the incentives to undertake R&D activities. Applied to the understanding of the growth enhancing role of both capital and R&D subsidies, we conclude that the positive effect of modernization generally more than compensate the negative effect of obsolescence

Keywords: Shumpeterian growth; Creative destruction; Embodiment; Obsolescence; Modernization (search for similar items in EconPapers)
JEL-codes: E22 E32 O40 (search for similar items in EconPapers)
Pages: 16
Date: 2002-11-01
New Economics Papers: this item is included in nep-dev, nep-dge and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Obsolescence and modernization in the growth process (2005)
Working Paper: Obsolescence and modernization in the growth process (2005)
Working Paper: Obsolescence and modernization in the growth process (2002)
Working Paper: Obsolescence and Modernization in the Growth Process (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2002043

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