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This paper analyzes and compares two alternative policies of determining the service life and replacement demand for vintage equipment under embodied technological change. The policies are the infinite-horizon replacement and the transitory replacement ending with scrapping. The corresponding...
Persistent link: https://www.econbiz.de/10014049526
We embed the microeconomic decisions associated with investment under uncertainty, capacity utilization, and machine … mean-preserving spread in the productivity of investment raises aggregate investment, productivity, and output. Increases … in uncertainty have important dynamic implications, causing sustained increases in investment and hours and a medium …
Persistent link: https://www.econbiz.de/10014072172
In this paper, we embed the microeconomic decisions associated with investment under uncertainty, capacity utilization … about the productivity of an investment project typically reduces investment at the micro level, but it raises aggregate … investment. Increases in uncertainty also have important dynamic implications, causing sustained increases in investment and …
Persistent link: https://www.econbiz.de/10014065002
In this note we compare the laissez-faire steady-state solution in the Howitt and Aghion (1998) model to the social optimum. The analysis offers several new insights in comparison to the welfare analysis in Aghion and Howitt (1992). We find various new distortions between private and optimal...
Persistent link: https://www.econbiz.de/10011401108
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The macroeconomic effects on growth, investment and private sector employment of different ways of rolling back the … cutting public spending on private goods induce an investment boom. Making the tax system less progressive by cutting tax … credits and the income tax rate induces an investment boom as well. The effects of endogenous growth, adjustment costs for …
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