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Article Dans Une Revue Journal of Economic Dynamics and Control Année : 2010

Maintenance and investment: Complements or substitutes? A reappraisal

G. Fabbri
F. Gozzi
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Résumé

A benchmark AK optimal growth model with maintenance expenditures and endogenous utilization of capital is considered within an explicit vintage capital framework. Scrapping is endogenous, and the model allows for a clean distinction between age and usage dependent capital depreciation and obsolescence. It is also shown that in this set-up past investment profile completely determines the size of current maintenance expenditures. Among other findings, a closed-form solution to optimal dynamics is provided taking advantage of very recent development in optimal control of infinite dimensional systems. More importantly, and in contrast to the pre-existing literature, we study investment and maintenance co-movements without any postulated ad-hoc depreciation function. In particular using impulse response experiments, we find that optimal investment and maintenance do move together in the short-run in response to neutral technological shocks, which seems to be more consistent with the data.
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Dates et versions

hal-00743831 , version 1 (21-10-2012)

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R. Boucekkine, G. Fabbri, F. Gozzi. Maintenance and investment: Complements or substitutes? A reappraisal. Journal of Economic Dynamics and Control, 2010, 34 (12), pp.2420. ⟨10.1016/j.jedc.2010.06.007⟩. ⟨hal-00743831⟩

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