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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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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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