We present an intertemporal model of consumption and savings incorporating liquidity constraints and non-separable preferences. We solve the problem numerically and characterize the optimal consumption behavior. We explore the traditional puzzles highlighted in the empirical literature as excess...

This paper considers a multi-sectoral endogenous growth model, that reproduces the essental aspects of an ‘ICT-based economy’, in which a central role is played by human capital accumulation. Indeed, households also invest in human capital through schooling, and this turns out to be the...

We use two stage optimal control techniques to solve some adoption problems under embodied technical change. We first solve a benchmark problem without learning behavior. At the date of switching, the consumption level is shown to drop, as the relative price of capital goes down (obsolescence)....

This paper derives the optimal pace of capital accumulation at the firm level and the corresponding investment dynamics in the presence of an energy-saving technological progress. Energy and capital are complementary. When technical progress is disembodied, the firm invests once at the first...

This paper explores the interactions between maintenance, adoption and investment activities when labor is heterogeneous. We consider that adoption activities are intensive in human capital whereas capital maintenance requires unskilled labor. Among the main results, we find that the optimal...

This paper develops a multi-sectoral endogenous growth model in order to reproduce some of the essential characteristics of the so-called “ICT Revolution”. The economy consists of four sectors and the most important features are the embodied nature of technological progress, the horizontal...

In this paper, we present a simple vintage capital growth model in which both exogenous and endogenous fluctuations sources are present. Indeed, it can be seen as a particular case of Caballero and Hammour (1996)'s creative destruction model, with advantage that analytical characterization of...

This paper studies the conditions under which an IT revolution may endogenously occur. To this end, we construct an endogenous growth multisectoral model with a preeminent IT sector. Technological progress is embodied : New softwares can only be run on the most recent generations and hardware....

By deriving the necessary conditions for a multi-stage discounted optimal control problem where the endogenous switching instants between regimes appear as an argument of the objective function and the state equation, we analyze the optimal pattern of technology adoption under embodiment with a...

In this paper, we build up a general equilibrium model explicitly incorporating Schumpeterian growth à la Aghion and Howitt (1992) and a vintage capital structure in line with Solow (1960). In this set-up, we show that the investment rate is a fundamental determinant of the profitability of...