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Vintage capital and the dynamics of the AK model

Boucekkine, Raouf and Licandro, Omar and Puch, Luis A. and Rio, Fernando del (2003) Vintage capital and the dynamics of the AK model. [Working Paper or Technical Report]

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Abstract

This paper analyzes the equilibrium dynamics of an AK-type endogenous growth model with vintage capital. The inclusion of vintage capital leads to oscillatory dynamics governed by replacement echoes, which additionally influence the intercept of the balanced growth path. These features, which are in sharp contrast to those from the standard AK model, can contribute to explaining the short-run deviations observed between investment and growth rates time series. To characterize the optimal solutions of the model we develop
analytical and numerical methods that should be of interest for the general resolution of endogenous growth models with vintage capital.

Item Type:Working Paper or Technical Report
Additional Information:JEL classification numbers: E22, E32, O40
Uncontrolled Keywords:Endogenous growth, Vintage capital, AK model, Difference-differential equations
Subjects:Social sciences > Economics > Econometrics
Series Name:Documentos de trabajo del Instituto Complutense de Análisis Económico (ICAE)
Volume:2003
Number:0310
ID Code:7690
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Deposited On:10 Mar 2008
Last Modified:06 Feb 2014 07:55

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