Capital Accumulation Under Technological Progress and Learning

A Vintage Capital Approach

Feichtinger, Gustav & Hartl, Richard F. & Kort, Peter M. & Veliov, Vladimir M., 2006. "Capital accumulation under technological progress and learning: A vintage capital approach," European Journal of Operational Research, Elsevier, vol. 172(1), pages 293-310, July.


In the paper, a model is developed considering the ideas that recent equipment has more productivity because of technological progress but old equipment also has improved productivity due to learning effect. The model comes out with capital accumulation when both old capital items and new capital items have higher productivity. It results some purchase of old vintage capital equipment even though recent vintage has higher productivity due to technological progress. A proposition is made in the paper.