Creator

• Cooley, Thomas F.
• Greenwood, Jeremy, 1953-
• Yorukoglu, Mehmet

Series

• Discussion paper (Federal Reserve Bank of Minneapolis. Institute for Empirical Macroeconomics)

Issue number

• 095

Date created

• 1994-12-01

Abstract

• We construct a vintage capital model of economic growth in which the decision to replace old technologies with new ones is modeled explicitly. Depreciation in this environment is an economic, not a physical concept. We describe the balanced growth paths and the transitional dynamics of this economy. We illustrate the importance of vintage capital by analyzing the response of the economy to fiscal policies designed to stimulate investment in new technologies.

Subject (JEL)

• O41 - One, Two, and Multisector Growth Models
• E13 - General Aggregative Models: Neoclassical
• E22 - Investment; Capital; Intangible Capital; Capacity

Related information

• Published in: Journal of Monetary Economics (Vol. 40, No. 3, December 1997, pp. 457-499) https://doi.org/10.1016/S0304-3932(97)00055-X.

Corporate Author

• Federal Reserve Bank of Minneapolis. Institute for Empirical Macroeconomics

Publisher

• Federal Reserve Bank of Minneapolis

Resource type

• Research Paper

DOI

•  https://doi.org/10.21034/dp.95

License

• Creative Commons BY-NC Attribution-NonCommercial 4.0 International

In Collection:

• Discussion Papers

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