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Endogenous Depreciation Rate and Economic Growth (Tasa De Depreciación Endógena Y Crecimiento Económico)

Authors: Julian David Parada;

Endogenous Depreciation Rate and Economic Growth (Tasa De Depreciación Endógena Y Crecimiento Económico)

Abstract

We study the features of the incentives for investing in capital goods with higer durability. We argue that economies which invest in capital goods with less durability may have a lower economic growth. We build a theoretical model with endogenous depreciation rate. The model we present is one of technical innovations. Technologies are differentiated by depreciation rates and smaller depreciation rates are more costly. In this setting there can be more than one steady state because of the complementarity between capital and depreciation rates. The main result of the paper is the existence of poverty traps with high depreciation rates. En este trabajo se estudian las caracteristicas de los incentivos para invertir en bienes de capital con mayor durabilidad. Se considera el hecho de que las economias que invierten en bienes de capital menos duraderos pueden tener menor crecimiento economico. Se elabora un modelo teorico en el que la tasa de depreciacion es endogena y su reduccion refleja innovaciones tecnologicas. Las tecnologias se diferencian por la tasa de depreciacion y aquellas que son mas durables son mas costosas. Esta estructura puede conducir a dos estados estacionarios debido a la complementariedad entre el capital y la tasa de depreciacion. El principal resultado del documento es que se encuentran trampas de pobreza asociadas con altas tasas de depreciacion.

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
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