In this paper we look at the behaviour of maintenance, utilization and physical depreciation over the business cycle … encompasses the baseline real business cycle model, where the depreciation rate is fixed, or versions of that model where the … depreciation rate is an exogenous stochastic process. It also encompasses versions of the real business cycle model where capital …

not last too long? In this Paper we ponder the optimal rate of depreciation of physical capital, first in the Solow model … and then in a model of endogenous growth with learning-by-doing. Optimal durability and depreciation, including … the optimal level of durability; hence, the higher the optimal rate of depreciation. We then use a customer-market model …