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Endogenous Growth Theory in a Vintage Capital Model

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  • Bardhan, Pranab
  • Priale, Rodrigo

Abstract

This is a model of quality ladder of machines in an endogenous growth context, when some machines are scrapped while others coexist with the latest variety, with the economic life of machines endogenously determined as in old vintage-capital models. Policies that affect this economic life of machines (for example, those influencing the gross savings or investment rate, or trade policy in a two-sector open economy) will have an effect on the long-run growth rate.
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Suggested Citation

  • Bardhan, Pranab & Priale, Rodrigo, 1996. "Endogenous Growth Theory in a Vintage Capital Model," Center for International and Development Economics Research, Working Paper Series qt1363t4jg, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
    • Handle: RePEc:cdl:ciders:qt1363t4jg
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    References listed on IDEAS

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    1. Pranab Bardhan, 1969. "Equilibrium Growth in a Model with Economic Obsolescence of Machines," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 83(2), pages 312-323.
    2. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(1), pages 43-61.
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    5. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    6. Boucekkine, Raouf & Germain, Marc & Licandro, Omar, 1997. "Replacement Echoes in the Vintage Capital Growth Model," Journal of Economic Theory, Elsevier, vol. 74(2), pages 333-348, June.
    7. Segerstrom, Paul S & Anant, T C A & Dinopoulos, Elias, 1990. "A Schumpeterian Model of the Product Life Cycle," American Economic Review, American Economic Association, vol. 80(5), pages 1077-1091, December.
    8. Williamson, Jeffrey G, 1971. "Optimal Replacement of Capital Goods: The Early New England and British Textile Firm," Journal of Political Economy, University of Chicago Press, vol. 79(6), pages 1320-1334, Nov.-Dec..
    9. J. Bradford De Long & Lawrence H. Summers, 1991. "Equipment Investment and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 445-502.
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    11. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    12. Bardhan, Pranab & Kletzer, Ken, 1984. "Dynamic effects of protection on productivity," Journal of International Economics, Elsevier, vol. 16(1-2), pages 45-57, February.
    13. Alwyn Young, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 641-680.
    14. Chari, V V & Hopenhayn, Hugo, 1991. "Vintage Human Capital, Growth, and the Diffusion of New Technology," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1142-1165, December.
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    Cited by:

    1. Boucekkine, Raouf & del Rio, Fernando & Licandro, Omar, 2005. "Obsolescence and modernization in the growth process," Journal of Development Economics, Elsevier, vol. 77(1), pages 153-171, June.
    2. Frankel, J-A & Rose, A-K, 1996. "Economic Structure and the Decision to Adopt a Common Currency," Papers 611, Stockholm - International Economic Studies.
    3. Maurice Obstfeld, 1989. "Dynamic Seigniorage Theory: An Exploration," NBER Working Papers 2869, National Bureau of Economic Research, Inc.
    4. Hsieh, Chang-Tai, 2001. "Endogenous growth and obsolescence," Journal of Development Economics, Elsevier, vol. 66(1), pages 153-171, October.
    5. Peter Funk, 2005. "Competition and Growth in a Vintage Knowledge Model," Working Paper Series in Economics 15, University of Cologne, Department of Economics.
    6. Funk, Peter, 2008. "Entry and growth in a perfectly competitive vintage model," Journal of Economic Theory, Elsevier, vol. 138(1), pages 211-236, January.

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