The Economic Theory of Replacement and Depreciation

  • Dale W. Jorgenson


The economic theory of production — including the description of technology, the conditions for producer equilibrium, and the response of variables determined in the theory to changes in parameters — may be developed in a form that abstracts from specific interpretations.1 In the intertemporal theory of production each commodity is distinguished by point of time. As an illustration, an hour of labour today and an hour of labour tomorrow are treated as distinct commodities. Given this convention the intertemporal theory of producer behaviour is formally analogous to the standard atemporal theory.2


Cash Flow Capital Stock Technical Change Capital Good Durable Good 
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© Dale W. Jorgenson 1974

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  • Dale W. Jorgenson

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