Capital Deepening Response in an Economy with Heterogenous Capital Goods.

This article investigates the capital deepening response in an economy with heterogeneous capital goods. The authors of this article see that within each sector their definition of capital deepening response may or may not be satisfied. However, the authors stated that even if each sector is regular, this does not ensure the model will be regular in the aggregate that will depend upon the relative capital intensities of the different industries and how labor shifts between them in response to interest rate changes.