Vintage capital theory: Three breakthroughs

Raouf Boucekkine (1) , David de La Croix (2) , Omar Licandro (3)

1 GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille
2 CORE - Department of Economics
3 IAE - Institut d'Anàlisi Econòmica

Vintage capital growth models have been at the heart of growth theory in the 60s. This research line collapsed in the late 60s with the so-called embodiment controversy and the technical sophisitication of the vintage models. This paper analyzes the astonishing revival of this literature in the 90s. In particular, it outlines three methodological breakthroughs explaining this resurgence: a growth accounting revolution, taking advantage of the availability of new time series, an optimal control revolution allowing to safely study vintage capital optimal growth models, and a vintage human capital revolution, along with the rise of economic demography, accounting for the vintage structure of human capital similarly to physical capital age structuring. The related literature is surveyed.

Mots clés: Vintage capital; embodied technical progress; growth accounting; optimal control; endogenous growth; vintage human capital; demography.; demography

Domaines: Economies et finances

Raouf Boucekkine, David de La Croix, Omar Licandro. Vintage capital theory: Three breakthroughs. 2011. ⟨halshs-00599074⟩