This paper analyzes the equilibrium dynamics of and optimal growth model that incorporates endogenous depreciation, variable capital utilization, and expenditures on the maintenance of physical capital. Maintenance acts as a substitute for investment, since it reduces the depreciation of...

This paper examines how a scrappage subsidy affects the lifetime of durable goods when secondhand markets are present. To this end, we propose a vintage model to analyze the replacement decision in an economy in which high and low income agents trade on a durable good. Thus, the existence of a...