The rapid increase in U.S. economic growth during the late 1990s inspired speculation that an acceleration in the rate of technological progress had given rise to an increase in potential output growth. This paper considers the transition dynamics associated with such a change using a general equilibrium framework that incorporates stochastic growth trends. The model suggests that transition dy...

R obert Solow’s (1956) neoclassical model reigns as the standard theory of economic growth. The Solow model begins with the assumption that capital accumulation is subject to diminishing marginal returns. It attributes sustained growth in national income per capita to technological progress that proceeds at a constant, exogenously given rate. Thus, it is an exogenous growth model. Recently, eco...

The paper furthers the neoclassical theory of earnings inequality. The inequality multiplier is derived as the amount by which inequality in skills must be multiplied to yield earnings inequality. Neutral technological change and the real interest rate affect inequality by changing capital per worker. The effect of capital per worker on the inequality multiplier is related to skill differential...

This paper proposes a stochastic model of investment with embodied technological progress, in which ...rms invest not only to expand the capacity as in Pindyck (1988) but also to replace old machines. The scrapping decision or the age of the oldest machine is then endogenous and evolves stochastically. Uncertainty increases the optimal age of the machines in use, and due to uncertainty, not onl...

In empirical tests guided by recent theory (e.g., Hughes, Liu and Liu 2007; and Lambert, Leuz and Verrecchia 2012), we examine the joint effects of information asymmetry and information precision on the cost of capital and how these effects vary based on the amount and quality of available information and the level of market competition. Consistent with theory, we find that average information ...

We consider a variety of vintage capital models of a firm’s choice of technology under uncertainty in the presence of adjustment costs and technology-specific learning. Similar models have been studied in a deterministic setting. Part of our objective is to examine the robustness of the implications of the certainty models to uncertainty. We find that the answer crucially depends on the specifi...

We consider a variety of vintage capital models of a firm’s choice of technology under uncertainty in the presence of adjustment costs and technology-specific learning. Similar models have been studied in a deterministic setting. Part of our objective is to examine the robustness of the implications of the certainty models to uncertainty. We find that the answer crucially depends on the specifi...

The Health Care Financing Administration (HCFA) has proposed incorporating hospital capital payments into the Medicare prospective payment system. HCFA's proposal includes an adjustment to capital payments for geographic differences in capital costs, derived from the prospective payment system area hospital wage index. Alternatively, the geographic adjustment could be based on an area construct...

steel industry is one of the most consumption of energy in the world, which is related to melting furnace which result environmental pollution. we calculate the energy consumption and capital cost of dust collectors of venturi scrubber (vs) and electrostatic precipitator (esp) which are connected to melting furnace in respect to industrial ecology for selection of appropriate dust collection sy...

The mathematical programming technique Data Envelopment Analysis is used to test the hypothesis of Averch and Johnson that utility regulation leads to overuse of capital. The regulated firm earns a return s greater than its cost of capital r, an implicit capital subsidy resulting in allocative inefficiency. Technical and Allocative inefficiency are based on Cost and Production Frontiers from 33...