Aruga, Osamu (2009): The Allocation of Investment across Vintages of Technology.
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This paper proposes a new mechanism that explains continued investment in older-vintage technology which rests on complementarity between long-lived and short-lived vintage-specific capital. The main result is a threshold condition that relates the rate of vintage-specific technological progress (ˆq) to two investment patterns: if ˆq is above the threshold, all investment is allocated to the newest-vintage technology; otherwise, firms direct part of their investment to older-vintage technologies. The evidence supports our model's empirically testable implications: as ˆq declines, investment is allocated more toward older-vintage technology; and equipment-price changes depend on capital's heterogeneous rates of depreciation.
|Item Type:||MPRA Paper|
|Original Title:||The Allocation of Investment across Vintages of Technology|
|Keywords:||Vintage Capital, Intangible Capital, Capital Heterogeneity, Pricing of Capital Goods, Maintenance and Repair|
|Subjects:||E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E22 - Capital; Investment; Capacity
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity
|Depositing User:||Osamu Aruga|
|Date Deposited:||17. Feb 2011 19:26|
|Last Modified:||15. Feb 2013 12:06|
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Available Versions of this Item
Conventional or New? Optimal Investment Allocation across Vintages of Technology. (deposited 01. Dec 2007 12:20)
Conventional or New? Optimal Investment Allocation across Vintages of Technology. (deposited 01. Nov 2009 14:22)
The Allocation of Investment across Vintages of Technology. (deposited 15. Nov 2009 15:15)
The Allocation of Investment across Vintages of Technology. (deposited 07. Apr 2010 12:14)
- The Allocation of Investment across Vintages of Technology. (deposited 17. Feb 2011 19:26) [Currently Displayed]
- The Allocation of Investment across Vintages of Technology. (deposited 07. Apr 2010 12:14)
- The Allocation of Investment across Vintages of Technology. (deposited 15. Nov 2009 15:15)
- Conventional or New? Optimal Investment Allocation across Vintages of Technology. (deposited 01. Nov 2009 14:22)