The Embodiment Controversy: on the Policy Implications of Vintage Capital models

Roberto Samaniego

MPRA Paper from University Library of Munich, Germany

Abstract: We explore the long run impact of policy on the level of economic activity through changes in the vintage distribution of capital, in a model where different vintages coexist in production. Because firms can choose the vintage of capital in which they invest, investment subsidies do not in general affect the vintage structure of capital. In contrast, vintage-specific taxes or subsidies that target the newest vintages of capital can significantly affect output and welfare in the long run, mainly downwards.

Keywords: Embodiment controversy; vintage capital; capital taxation; investment subsidies. (search for similar items in EconPapers)
JEL-codes: O11 O14 O41 O43 (search for similar items in EconPapers)
Date: 2016-08-26
New Economics Papers: this item is included in nep-gro
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Related works:
Journal Article: The Embodiment Controversy: On the Policy Implications of Vintage Capital Models (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:73348

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