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Growth with Unused Capacity and Endogenous Capital Depreciation
Author(s) -
Patriarca Fabrizio,
Sardoni Claudio
Publication year - 2014
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/meca.12053
Subject(s) - depreciation (economics) , economics , capital (architecture) , distribution (mathematics) , function (biology) , capacity utilization , mainstream , microeconomics , perspective (graphical) , monetary economics , capital formation , financial capital , mathematical analysis , mathematics , archaeology , history , philosophy , theology , evolutionary biology , artificial intelligence , biology , computer science , profit (economics)
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.