This paper studies the effect of durability on the financing of durable assets. We show that more durable assets require larger down payments of internal funds per unit of capital making them harder to finance, because durability affects the price of an asset and hence the overall financing need...

If machines are indivisible, a vintage capital model must give rise to income inequality. If new machines are always better than old ones and if society cannot provide everyone with a new machine all of the time, inequality will result. I explore this mechanism in detail. If technology resides...

Neoclassical investment models predict that firms should make frequent, small adjustments to their capital stocks. Microeconomic evidence, however, shows just the opposite -- firms make infrequent, large adjustments to their capital stocks. In response, researchers have developed models with...

Much has been written about the seemingly less formal, more agile biotechnology industry and its extensive interactions with academia and startups, as well as its distinct scientific, manufacturing and regulatory profile. Employing a data base encompassing all 96 biologics and 212 small...

Pigouvian taxes can fully correct for market failures due to externalities, but actual policies are commonly forced to deviate from the Pigouvian ideal due to administrative or political constraints. This paper derives sufficient statistics, which require a minimum of market information, that...