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Endogenous depreciation, mismeasurement of aggregate capital, and the productivity slowdown

  • Mukoyama, Toshihiko

When we allow capital depreciation to be endogenous, the acceleration of investment-specific technological progress can distort the measurement of the aggregate capital stock. Our quantitative exercise shows that this effect may cause a substantial bias in the measurement of total factor productivity and can account for a large portion of the observed productivity slowdown since the 1970s.

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File URL: http://www.sciencedirect.com/science/article/pii/S0164-0704(06)00059-0
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Article provided by Elsevier in its journal Journal of Macroeconomics.

Volume (Year): 30 (2008)
Issue (Month): 1 (March)
Pages: 513-522

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Handle: RePEc:eee:jmacro:v:30:y:2008:i:1:p:513-522
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622617

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  1. Wykoff, Frank C, 1970. "Capital Depreciation in the Postwar Period: Automobiles," The Review of Economics and Statistics, MIT Press, vol. 52(2), pages 168-72, May.
  2. Cooley, Thomas F. & Greenwood, Jeremy & Yorukoglu, Mehmet, 1997. "The replacement problem," Journal of Monetary Economics, Elsevier, vol. 40(3), pages 457-499, December.
  3. Charles R. Hulten, 1992. "Growth Accounting When Technical Change is Embodied in Capital," NBER Working Papers 3971, National Bureau of Economic Research, Inc.
  4. Plutarchos Sakellaris & Daniel J. Wilson, 2004. "Quantifying Embodied Technological Change," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 7(1), pages 1-26, January.
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  8. Adda, Jérôme & Cooper, Russell W., 1997. "Balladurette and jupette: a discrete analysis of scrapping subsidies," CEPREMAP Working Papers (Couverture Orange) 9711, CEPREMAP.
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  17. Chari, V V & Hopenhayn, Hugo, 1991. "Vintage Human Capital, Growth, and the Diffusion of New Technology," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1142-65, December.
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  19. repec:ucp:bknber:9780226304557 is not listed on IDEAS
  20. Caballero, Ricardo J., 1999. "Aggregate investment," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 12, pages 813-862 Elsevier.
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