https://depositonce.tu-berlin.de/bitstream/11303/10303/1/1-s2.0-S0040162517300276-main.pdf

Predicting the future of additive manufacturing: A Delphi study on economic and societal implications of 3D printing for 2030

I have been told that everybody has dreams, but that some people habitually forget them even before they wake up. That seems to be what happens to me. So I do not know if I have ever dreamt about giving this Lecture. I know that I have been in this room before, but that was in real life, and I was awake. If I have given this lecture in my dreams, there is no doubt that the topic was the theory of economic growth. I am told that the subject of the lecture should be "on or associated with the work for which the Prize was awarded." That is pretty unambiguous. But I would not even wish to use the leeway offered by the phrase "associated with." Growth theory is exactly what I want to talk about: for itself, for its achievements, for the gaps that remain to be filled, and also as a vehicle for some thoughts about the nature of theoretical research in macroeconomics, and empirical research as well.

Growth Theory and After

This paper develops an economic theory of replacement investment that can provide a basis for specifying an econometric model of investment behavior. The long-run and short-run effects of changes in the interest rate and in tax laws are examined. The paper also investigates several reasons why the common assumption of a technologically constant rate of replacement is incorrect even as an asymptotic limit. LARGE VARIATIONS in capital spending continue to motivate econometric studies of investment behavior. The past decade has seen the development of attempts to model net investment as the adjustment of the capital stock to a desirable level. Building on earlier work by Lutz [35], Haavelmo [21], and others, Jorgenson and his collaborators (e.g. [24, 28, 31, and 33]) have provided an operational model of net capital accumulation that relates desired capital to the cost of capital services. Although serious objections have been raised about the specification of the optimal capital stock (including [5, 9, 13, and 15]) and about the arbitrary nature of the adjustment dynamics [37], it is likely that some form of this general model will continue to provide a framework for future investment studies. In contrast to these developments of a theory of capital expansion, replacement investment continues to be analyzed in terms of a non-economic model of technical necessity. Jorgenson and others have adopted the simplifying assumption that replacement investment is a constant proportion of the capital stock.2 This assumption has been challenged and contrary evidence has been offered by Feldstein and Foot [14] and Eisner [10]. The purpose of the current paper is to examine several aspects of a theory of replacement investment. We hope not only to show that a model with a constant replacement rate is implausible and unsatisfactory but also to provide a basis for better empirical work in the future. The magnitude of replacement investment (the annual rate of replacement investment generally exceeds expansion investment) makes this issue a matter of substantial importance.

Toward An Economic Theory of Replacement Investment

Replacement echoes in the vintage capital growth model

https://elischolar.library.yale.edu/cgi/viewcontent.cgi?article=1135&context=egcenter-discussion-paper-series

Recent Exercises in Growth Accounting: New Understanding or Dead End?

We analyze in this paper a completely aggregated model of production in which output is produced by inputs of homogeneous labor and heterogeneous capital goods, and allocated either to consumption or to use as capital goods. Allocations are irreversible: capital goods can never be directly consumed. Fixed coefficients rule: any concrete unit of capital has a given output capacity and requires a given complement of labor. Technological progress continuously differentiates new capital goods from old. But we assume that the “ latest model ” in capital goods has no smaller capacity and no higher labor requirement than any older-model capital goods with the same reproduction cost. Thus each instant’s gross investment will take the form of the latest-model capital. There is no problem of the optimal “ depth ” of capital. The main effect of an increase in gross investment is to modernize the capital stock in use.

C. C. von Weizsacker

Papers

Neoclassical Growth with Fixed Factor Proportions

Errata: Neoclassical Growth with Fixed Factor Proportions

Economic dimensions of prospective technological studies at the Joint Research Centre of the European Commission