Obsolescence of Capital and Investment Spikes

• 成果类型: Article
• 署名作者: Fishman, Arthur; Jovanovic, Boyan
• 署名单位: Ariel University; Bar Ilan University; New York University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20190062
• 发表日期: 2021
• 页码: 135-171
• 关键词: replacement

摘要

The prospect of capital obsolescence inhibits investment. Investors thus become more optimistic when the obsolescence of their capital slows down. We propose a model with no fixed costs of investment, and random technological progress that induces obsolescence of capital in place. Spikes occur precisely when technological progress slows down. Moreover, the more variable the progress, the larger are the spikes. Cross-industry data show that where price of capital declines are more variable, investment spikes are larger.