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Producing Tangible and Intangible Capital

Author

Listed:
  • Matthieu Gomez
  • Emilien Gouin-Bonenfant

Abstract

We compare the production technologies of tangible and intangible investment using Bureau of Economic Analysis input-output tables and Integrated Industry-Level Production Account (KLEMS). We show that intangible investment is built mainly with domestic, college-educated labor and relatively few imported inputs, while tangible investment depends much more on foreign inputs and less on high-skill labor. This contrast implies that expanding intangible capital is more likely to run into domestic skill bottlenecks—making its supply less elastic and its response to subsidies more wage intensive than quantity intensive.

Suggested Citation

  • Matthieu Gomez & Emilien Gouin-Bonenfant, 2026. "Producing Tangible and Intangible Capital," AEA Papers and Proceedings, American Economic Association, vol. 116, pages 498-503, May.
    • Handle: RePEc:aea:apandp:v:116:y:2026:p:498-503
    DOI: 10.1257/pandp.20261080
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    More about this item

    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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