The market for used capital: Endogenous irreversibility and reallocation over the business cycle
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, Scholarly Edition
Lanteri, A
September 1, 2018
This paper studies the business- cycle dynamics of secondary markets for physical capital and their effects on the macroeconomy. In the data, both capital reallocation and the price of used capital are procyclical. To rationalize these facts, I propose a model with endogenous partial irreversibility, where used investment goods are imperfect substitutes for new ones because of firm- level capital specificity. Equilibrium dynamics in the market for used capital induce countercyclical dispersion of marginal products of capital, propagate movements in aggregate TFP, and provide a microfoundation for state- dependent nonconvex capital adjustment costs.
Duke Scholars
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Publication Date
September 1, 2018
Start / End Page
2383 / 2419
Related Subject Headings
- Economics
- 38 Economics
- 35 Commerce, management, tourism and services
- 15 Commerce, Management, Tourism and Services
- 14 Economics
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Lanteri, A. (2018). The market for used capital: Endogenous irreversibility and reallocation over the business cycle. https://doi.org/10.1257/aer.20160131
Lanteri, A. “The market for used capital: Endogenous irreversibility and reallocation over the business cycle,” September 1, 2018. https://doi.org/10.1257/aer.20160131.
Lanteri A. The market for used capital: Endogenous irreversibility and reallocation over the business cycle. 2018. p. 2383–419.
Lanteri, A. The market for used capital: Endogenous irreversibility and reallocation over the business cycle. 1 Sept. 2018, pp. 2383–419. Scopus, doi:10.1257/aer.20160131.
Lanteri A. The market for used capital: Endogenous irreversibility and reallocation over the business cycle. 2018. p. 2383–2419.
DOI
Publication Date
September 1, 2018
Start / End Page
2383 / 2419
Related Subject Headings
- Economics
- 38 Economics
- 35 Commerce, management, tourism and services
- 15 Commerce, Management, Tourism and Services
- 14 Economics