cannot obtain consistent aggregates of capital stock and replacement investment. … voluminous literature that has developed ignores the marked difference be-tween replacement and scrapping and glosses over their … result when useful life, replacement and scrapping are placed in the center of the analysis. It does so by considering an …

replacement ending with scrapping. The corresponding vintage capital models are formulated in the dynamic optimization framework …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 …

assets. More specifically, the analysis shows that: replacement under uncertainty leads to optimal lifetimes of assets that … elasticity of demand, , scrapping under uncertainty yields life-times that may be shorter or longer than those determined by … replacement under certainty; and, irrespective of the values of these parameters, the optimal lifetime of assets from a pol-icy of …

used durables, etc., b) switching among replacement policies produces bursts or slumps in replacement investment much like … determine the service life, and hence the replacement demand for durables, in the short run and in the long run. For this … purpose the received multiperiod economic replacement model is extended in the light of more recent theoretical developments …

Firm-level investment is lumpy and volatile but aggregate investment is much smoother and highly serially correlated …. These different patterns of investment behavior have been viewed as indicating convex adjustment costs at the aggregate … yet at the same time generate lumpiness in plant-level investment. In particular, our model can (i) derive aggregate …