Title
Capital accumulation and embodied technological progress
Author
Faculty/Department
Faculty of Applied Economics
Publication type
article
Publication
New York, N.Y. ,
Subject
Economics
Mathematics
Source (journal)
Journal of optimization theory and applications. - New York, N.Y.
Volume/pages
154(2012) :2 , p. 588-614
ISSN
0022-3239
ISI
000306288300014
Carrier
E
Target language
English (eng)
Full text (Publishers DOI)
Affiliation
University of Antwerp
Abstract
This paper combines technology adoption with capital accumulation taking into account technological progress. We model this as a multi-stage optimal control problem and solve it using the corresponding maximum principle. The model with linear revenue can be solved analytically, while the model with market power is solved numerically. We obtain that investment jumps upwards right at the moment that a new technology is adopted. We find that, if the firm has market power, the firm cuts down on investment before a new technology is adopted. Furthermore, we find that larger firms adopt a new technology later.
E-info
https://repository.uantwerpen.be/docman/iruaauth/061dc5/5f62487.pdf
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