How Important Is Technology Capital for the United States?
AbstractI construct measures of technology capital and country openness for the US economy and the rest of the world for 1982-2007. The key identifying assumption is that firms equalize returns on tangible and technology capital. For the US economy, technology capital is about one-third of tangible capital, and the degree of openness is between 0.61 and 0.70. I provide both a two-country estimation and a multicountry estimation, and find that the US estimates are almost identical in both cases. The welfare loss from totally closing the US economy is small, but the welfare gain from totally opening the US economy is large. (JEL E22, F41, O30)
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Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Journal: Macroeconomics.
Volume (Year): 4 (2012)
Issue (Month): 2 (April)
Find related papers by JEL classification:
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- McGrattan, Ellen R. & Prescott, Edward C., 2009.
"Openness, technology capital, and development,"
Journal of Economic Theory,
Elsevier, vol. 144(6), pages 2454-2476, November.
- Ellen McGrattan & Edward C. Prescott, 2007. "Openness, Technology Capital, and Development," NBER Working Papers 13515, National Bureau of Economic Research, Inc.
- Ellen R. McGrattan & Edward C. Prescott, 2007. "Openness, technology capital, and development," Working Papers 651, Federal Reserve Bank of Minneapolis.
- Ellen R. McGrattan & Edward C. Prescott, 2008. "Openness, technology capital, and development," Staff Report 396, Federal Reserve Bank of Minneapolis.
- Edward Prescott & Ellen McGrattan, 2008. "Openness, Technology Capital, and Development," 2008 Meeting Papers 111, Society for Economic Dynamics.
- Ambler, Steve & Paquet, Alain, 1994. "Stochastic Depreciation and the Business Cycle," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(1), pages 101-16, February.
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