We study the Markov equilibria of a model of free riding in which n infinitely lived agents choose between private consumption and irreversible contributions to a durable public good. We show that the set of equilibrium steady states converges to a unique point as depreciation converges to zero. For any level of depreciation, moreover, the highest steady state converges to the efficient level a...

This paper models a machine replacement and capacity expansion problem as an infinite-horizon linear program. We establish a strong duality result and show that stationary dual prices are optimal, regardless of initial conditions. These prices measure the economic value of owning vintage machinery and thus define depreciation schedules. We present necessary and sufficient conditions for straigh...

This paper uses a multicountry econometric model to examine Asia-type crises. Experiments are run for Thailand, Malaysia, the Philippines, and Korea, each corresponding to a depreciation of the country’s currency. The results suggest that both the expansionary and inflationary effects of a depreciation are in general fairly large.

Research and development (R&D) depreciation rates are critical to calculating the rates of return to R&D investments and capital service costs, both of which are important for capitalizing R&D investments in the national income and product accounts. Although important, measuring R&D depreciation rates is extremely difficult because both the price and output of R&D capital are generally unobserv...

Measuring the private returns to R&D requires knowledge of its private depreciation or obsolescence rate, which is inherently variable and responds to competitive pressure. Nevertheless, most of the previous literature has used a constant depreciation rate to construct R&D capital stocks and measure the returns to R&D, a rate usually equal to 15 per cent. In this paper I review the implications...

Extensive research has been devoted to economic production quantity (EPQ) problem. However, little atten-tion has been paid to problems where depreciation cost and process quality cost must be considered, simulta-neously. In this paper, we consider the economic production quantity model of minimizing the annual total cost subject to depreciation cost and process quality cost, where depreciation...