Date: 2014
Type: Article
Capital maintenance and depreciation over the business cycle
Journal of Economic Dynamics and Control, 2014, Vol. 39, pp. 273-286
ALBONICO, Alice, KALYVITIS, Sarantis, PAPPA, Evi, Capital maintenance and depreciation over the business cycle, Journal of Economic Dynamics and Control, 2014, Vol. 39, pp. 273-286
- https://hdl.handle.net/1814/31385
Retrieved from Cadmus, EUI Research Repository
This paper develops and estimates a stochastic general equilibrium model with capital maintenance, which affects endogenously the depreciation rate of capital. The estimate of maintenance series is found to track survey-based measures for Canada quite closely and to generate the procyclical pattern of maintenance observed in the data. We use our model estimates to infer the time profile of equipment capital depreciation in Canadian and US manufacturing. The depreciation rate is estimated to be volatile and highly procyclical in both countries.
Additional information:
Available online 25 December 2013.
Cadmus permanent link: https://hdl.handle.net/1814/31385
Full-text via DOI: 10.1016/j.jedc.2013.12.008
ISSN: 1879-1743; 0165-1889
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