Lund (2002a) showed in a CAPM-type model how tax depreciation schedules affect required expected returns after taxes … marginal investment is taxed together with inframarginal in an analytical model of decreasing returns. With imperfect loss …

found that depreciation increases the cost of capital before and after tax. Most of their assumptions are maintained …. However, commitment to perpetual reinvestment is in most cases not a reasonable assumption. Without it, depreciation decreases … the cost of capital before and after tax. The effect of depreciation is less in absolute value than in Levy and Arditti …

depreciation does not result in a lasting change in relative prices, namely a real depreciation, it will not provide the desirable …

exchange rate fluctuations to firm-level investment, and show that that this effect is asymmetric, much greater for …