Maintenance Costs, Obsolescence, and Endogenous Growth

We analyze the impact of obsolescence of economic inventions by incorporating maintenance costsin the endogenous growth model of expanding product varieties. This contrasts with the existingliterature, which ignores maintenance costs and uses the model of quality improvements todescribe obsolescence. If the maintenance costs become too high, the operating profits becomenegative and the firm stops producing the variety. This diminishes the life span of innovations,thus reducing the return on investment in research and development and the growth rate of theeconomy.

MoreLess

Year of publication:	2001
Authors:	Berden, Koen G. ; van Marrewijk, Charles
Publisher:	Amsterdam and Rotterdam : Tinbergen Institute
Subject:	Instandhaltung \| Kosten \| Innovation \| Lebenszyklus \| Neue Wachstumstheorie \| Theorie \| endogenous growth \| obsolescence \| maintenance \| innovation \| variety

freely available

Full text |

More access options

Check Google Scholar

In German libraries (KVK)

I need help

More details

Series:	Tinbergen Institute Discussion Paper ; 01-060/2
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	834287536 [GVK] hdl:10419/86078 [Handle] RePEc:dgr:uvatin:20010060 [RePEc]
Classification:	F43 - Economic Growth of Open Economies ; O31 - Innovation and Invention: Processes and Incentives ; O33 - Technological Change: Choices and Consequences; Diffusion Processes ; O41 - One, Two, and Multisector Growth Models
Source:	EconStor

Persistent link: https://www.econbiz.de/10010325047