Endogenous Growth , Capital Utilization and Depreciation ¤

  title={Endogenous Growth , Capital Utilization and Depreciation ¤},
  author={J. Aznar-M{\'a}rquez and J. R. Ruiz-Tamarit},
We study the one sector model of growth when a linear production technology is combined with adjustment costs and a technology for capital maintenance. Agents are allowed to under-use the installed capital and to vary the depreciation rate. This economy decides endogenously how much resources devotes to the accumulation of new capital and how much to maintenance and repair activities. We ...nd as striking results that the long-run depreciation and capital utilization rates are positively… CONTINUE READING

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