TY  - JOUR
AU  - Bernstein,Jeffrey I.
AU  - Nadiri,M. Ishaq
TI  - Investment, Depreciation, And Capital Utilization
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2571
PY  - 1988
Y2  - April 1988
UR  - http://www.nber.org/papers/w2571
L1  - http://www.nber.org/papers/w2571.pdf
N1  - Author contact info:
Jeffrey I. Bernstein
Department of Economics
University Park Campus
Florida International University
11200 S.W. 8th Street
Miami, FL 33199
Tel: 305/348-2592
E-Mail: jeffrey.bernstein@fiu.edu

M. Ishaq Nadiri
Department of Economics
New York University
19 W. 4th Street, 6th Floor
New York, NY  10012
Tel: 212/998-8968
Fax: 212/995-4013
E-Mail: min1@nyu.edu
AB  - The purpose of this paper is to analyze the determinants of capital durability and utilization and their interdependence with investment decisions. The approach is based on the view that the flow of undepreciated capital is an output to be used in future production. At each date capital and non-capital inputs are combined to produce current output and the capital inputs to be used for future production. Thus capital accumulation occurs in a joint product context as two kinds of output are produced, one type for current sale and one type for future production. Another issue investigated in this paper concerns the allocation of resources within a firm between installing and utilizing capital and labor training activities. Often this problem is ignored in the theory of investment, not only because depreciation is exogenous, but also due to the treatment of labor as a variable factor of production. However, it is well recognized that firms cannot costlessly adjust labor. Thus the second purpose of this paper is to analyze the intertemporal relationship between the durability of capital and the growth rate of labor.
ER  -