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What is the U.S. gross investment in intangibles? (At least) one trillion dollars a year!

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Author Info
Leonard Nakamura
Abstract

This paper argues that the rate of intangible investment – investment in the development and marketing of new products – accelerated in the wake of the electronics revolution in the 1970s. The paper presents preliminary direct and indirect empirical evidence that US private firms currently invest at least $1 trillion annually in intangibles. This rate of investment roughly equals US gross investment in nonresidential tangible assets. It also suggests that the capital stock of intangibles in the US has an equilibrium market value of at least $5 trillion.

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Paper provided by Federal Reserve Bank of Philadelphia in its series Working Papers with number 01-15.

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Date of creation: 2001
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Handle: RePEc:fip:fedpwp:01-15

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Keywords: Gross domestic product ; Investments;

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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. Eugene F. Fama & Kenneth R. French, . "Disappearing Dividends: Changing Firm Characteristics or Lower Propensity to Pay?."," CRSP working papers 509, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
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  2. Romer, Paul, 1994. "New goods, old theory, and the welfare costs of trade restrictions," Journal of Development Economics, Elsevier, vol. 43(1), pages 5-38, February. [Downloadable!] (restricted)
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  3. Andrew B. Abel, 1984. "R&D and the Market Value of the Firm: A Note," NBER Chapters, in: R & D, Patents, and Productivity, pages 261-270 National Bureau of Economic Research, Inc. [Downloadable!]
  4. Scherer, F. M. & Harhoff, Dietmar, 2000. "Technology policy for a world of skew-distributed outcomes," Research Policy, Elsevier, vol. 29(4-5), pages 559-566, April. [Downloadable!] (restricted)
  5. Stein, Jeremy C, 1997. "Waves of Creative Destruction: Firm-Specific Learning-by-Doing and the Dynamics of Innovation," Review of Economic Studies, Blackwell Publishing, vol. 64(2), pages 265-88, April. [Downloadable!] (restricted)
  6. Greenwood, J. & Jovanovic, B., 1999. "The IT Revolution and the Stock Market," RCER Working Papers 460, University of Rochester - Center for Economic Research (RCER). [Downloadable!]
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  7. Leonard I. Nakamura, 2001. "Education and training in an era of creative destruction," Working Papers 00-13R, Federal Reserve Bank of Philadelphia. [Downloadable!]
  8. Robert E. Hall, 1999. "The Stock Market and Capital Accumulation," NBER Working Papers 7180, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. Ellen R. McGrattan & Edward C. Prescott, 2001. "Is the Stock Market Overvalued?," NBER Working Papers 8077, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  10. Richard Peach & Charles Steindel, 2000. "A nation of spendthrifts? An analysis of trends in personal and gross saving," Current Issues in Economics and Finance, Federal Reserve Bank of New York, issue Sep. [Downloadable!]
  11. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," NBER Working Papers 3099, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-51, March. [Downloadable!] (restricted)
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  1. Baruch Lev, 2003. "Remarks on the measurement, valuation, and reporting of intangible assets," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 17-22. [Downloadable!]
  2. Carol Corrado & Charles Hulten & Daniel Sichel, 2006. "Intangible capital and economic growth," Finance and Economics Discussion Series 2006-24, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
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  3. Carol Corrado & Charles Hulten & Daniel Sichel, 2004. "Measuring capital and technology: an expanded framework," Finance and Economics Discussion Series 2004-65, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
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  4. Jakob B. Madsen & E. Philip Davis, 2004. "Equity Prices, Productivity Growth and 'The New Economy," FRU Working Papers 2004/11, University of Copenhagen. Department of Economics. Finance Research Unit. [Downloadable!]
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