Vintage capital and the dynamics of the AK model

  title={Vintage capital and the dynamics of the AK model},
  author={Raouf Boucekkine and Omar Licandro and Luis A. Puch and Fernando del R{\'i}o},
  journal={J. Economic Theory},
This paper analyzes the equilibrium dynamics of an AK-type endogenous growth model with vintage capital. The inclusion of vintage capital leads to oscillatory dynamics governed by replacement echoes, which additionally in‡uence the intercept of the balanced growth path. These features, which are in sharp contrast to those from the standard AK model, can contribute to explaining the short-run deviations observed between investment and growth rates time series. To characterize the convergence… CONTINUE READING
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