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Capital stocks, capital services, and depreciation: an integrated framework

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Nicholas Oulton
Sylaja Srinivasan

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Abstract

Neo-classical theory provides an integrated framework by means of which we can measure capital stocks, capital services and depreciation. In this paper the theory is set out and reviewed. It is found that the theory is quite robust and can deal with assets like computers that are subject to rapid obsolescence. Using the framework, estimates are presented of aggregate wealth, aggregate capital services and aggregate depreciation for the United Kingdom between 1979 Q1 and 2002 Q2, and the results are tested for sensitivity to the assumptions. The principal source of uncertainty in estimating capital stocks and capital services is found to relate to the treatment and measurement of investment in computers and software. Applying US methods for these assets to UK data has a substantial effect on the growth rate of capital services and on the ratio of depreciation to GDP.

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Paper provided by Bank of England in its series Bank of England working papers with number 192.

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(explanations, 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.)

  1. Colin Ellis & Simon Price, . "UK business investment: long-run elasticities and short-run dynamics," Bank of England working papers 196, Bank of England. [Downloadable!]
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  2. Susanto Basu & John G. Fernald & Nicholas Oulton & Sylaja Srinivasan, 2003. "The case of the missing productivity growth: or, does information technology explain why productivity accelerated in the United States but not the United Kingdom?," Working Paper Series WP-03-08, Federal Reserve Bank of Chicago. [Downloadable!]
    Other versions:
  3. Nicholas Oulton, 2004. "A Statistical Framework for the Analysis of Productivity and Sustainable Development," CEP Discussion Papers dp0629, Centre for Economic Performance, LSE. [Downloadable!]
  4. Susanto Basu & John G. Fernald & Nicholas Oulton & Sylaja Srinivasan, 2003. "The Case of the Missing Productivity Growth: Or, Does Information Technology Explain why Productivity Accelerated in the US but not the UK?," NBER Working Papers 10010, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Simon Price, 2004. "UK investment and the return to equity: Q redux," Money Macro and Finance (MMF) Research Group Conference 2004 87, Money Macro and Finance Research Group. [Downloadable!]
  6. Claudia HenrĂ­quez G., 2008. "Stock de Capital en Chile (1985-2005): MetodologĂ­a y Resultados," Economic Statistics Series 63, Central Bank of Chile. [Downloadable!]
  7. Demetrios Eliades & Olaf Weeken, . "The stock market and capital accumulation: an application to UK data," Bank of England working papers 251, Bank of England. [Downloadable!]
  8. Ester Gomes da Silva, 2009. "Capital services estimates in Portuguese industries, 1977-2003," FEP Working Papers 313, Universidade do Porto, Faculdade de Economia do Porto. [Downloadable!]
  9. Nicholas Oulton & Sylaja Srinivasan, 2005. "Productivity Growth and the Role of ICT in the United Kingdom: An Industry View, 1970-2000," CEP Discussion Papers dp0681, Centre for Economic Performance, LSE. [Downloadable!]
  10. Maria Abreu & Henri L.F. de Groot & Raymond J.G.M. Florax, 2004. "Spatial Patterns of Technology Diffusion: An Empirical Analysis using TFP," Tinbergen Institute Discussion Papers 04-079/3, Tinbergen Institute. [Downloadable!]
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  11. James Smith, . "That elusive elasticity and the ubiquitous bias: is panel data a panacea?," Bank of England working papers 342, Bank of England. [Downloadable!]
  12. Mirko Draca & Raffaella Sadun & John Van Reenen, 2006. "Productivity and ICT: A Review of the Evidence," CEP Discussion Papers dp0749, Centre for Economic Performance, LSE. [Downloadable!]
  13. Simon Price & Christoph Schleicher, . "Returns to equity, investment and Q: evidence from the United Kingdom," Bank of England working papers 310, Bank of England. [Downloadable!]
  14. Nicholas Oulton & Sylaja Srinivasan, . "Productivity growth in UK industries, 1970-2000: structural change and the role of ICT," Bank of England working papers 259, Bank of England. [Downloadable!]
  15. Kaloyan Ganev, 2005. "Measuring Total Factor Productivity: Growth Accounting for Bulgaria," GE, Growth, Math methods 0504004, EconWPA, revised 21 Apr 2005. [Downloadable!]
  16. Nicholas Oulton, 2005. "Ex Post Versus Ex Ante Measures of the User Cost of Capital," CEP Discussion Papers dp0698, Centre for Economic Performance, LSE. [Downloadable!]
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  17. Andrew Street & Padraic Ward, 2009. "NHS input and productivity growth 2003/4 - 2007/8," Working Papers 047cherp, Centre for Health Economics, University of York. [Downloadable!]
  18. Colin Ellis, . "Elasticities, markups and technical progress: evidence from a state-space approach," Bank of England working papers 300, Bank of England. [Downloadable!]
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