Progreso técnico incorporado, adopción y mantenimiento

Abstract

We study the properties of an optimal growth model of a developing economy with one-hoss shay vintage capital, where the scarce (skilled) labor resources can be allocated freely either to production, technology adoption or capital maintenance. Technological progress is partly embodied. Technology adoption features a kind of catching up law of motion according to a Nelson-Phelps scheme. We first analytically characterize the balanced growth paths of the economy. Second, we numerically investigate the short run dynamics of the model. Among numerous findings, we find that under exogenous technological accelerations, intensive technology adoption should be delayed, and maintenance acts as an optimal transitory substitute to adoption.