Growth with Unused Capacity and Endogenous Capital Depreciation

25 Pages Posted: 2 Oct 2014

See all articles by Fabrizio Patriarca

Fabrizio Patriarca

University of Rome I

Claudio Sardoni

University of Rome "La Sapienza"

Date Written: November 2014

Abstract

The paper contributes to the debate on growth and distribution in a non‐mainstream perspective. It looks at the role that capacity utilization plays in the process of growth under the hypothesis that the rate of capital depreciation is a function of the degree of capacity utilization. Our hypothesis implies results partly different from those obtained by other models in which capacity utilization plays a key role. In particular, a varying rate of depreciation affects the conditions under which distributional changes in favor of wages affect the rate of growth positively.

Suggested Citation

Patriarca, Fabrizio and Sardoni, Claudio, Growth with Unused Capacity and Endogenous Capital Depreciation (November 2014). Metroeconomica, Vol. 65, Issue 4, pp. 646-670, 2014, Available at SSRN: https://ssrn.com/abstract=2504288 or http://dx.doi.org/10.1111/meca.12053

Fabrizio Patriarca (Contact Author)

University of Rome I ( email )

Claudio Sardoni

University of Rome "La Sapienza" ( email )

Piazzale Aldo Moro 5
Roma, Rome 00185
Italy

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