{'fraction_non_alphanumeric': 0.01608325449385052, 'fraction_numerical': 0.007568590350047304, 'mean_word_length': 5.335329341317365, 'pattern_counts': {'":': 0, '<': 0, '<?xml version=': 0, '>': 0, 'https://': 0, 'lorem ipsum': 0, 'www.': 0, 'xml': 0}, 'pii_count': 0, 'substrings_counts': 0, 'word_list_counts': {'cursed_substrings.json': 0, 'profanity_word_list.json': 0, 'sexual_word_list.json': 0, 'zh_pornsignals.json': 0}}
Obsolescence Vs Modernization in a Schumpeterian Vintage Capital Model

In this paper, we build up a general equilibrium model explicitly incorporating Schumpeterian growth a la ` Aghion and Howitt (1992) and a vintage capital structure in line with Solow (1960). Technological progress is embodied. We show that the investment rate is a fundamental determinant of the proﬁtability of R&D in contrast to the R&D based growth models with disembodied technical progress. We characterize the balanced growth paths and point at the possible existence of multiple equilibria due to the strategic complementarity between investment and R&D activities. More importantly, the embodiment hypothesis is shown to give rise to a precise modernization mechanism through investment and the average age of capital. The modernization eﬀects of investment may well balance the typical obsolescence costs inherent to embodiment, a result that should be of interest in the current debate on the viability of the current information technology boom as a long run growth regime.