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

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  • Mukoyama, Toshihiko

Abstract

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.

Suggested Citation

  • Mukoyama, Toshihiko, 2008. "Endogenous depreciation, mismeasurement of aggregate capital, and the productivity slowdown," Journal of Macroeconomics, Elsevier, vol. 30(1), pages 513-522, March.
  • Handle: RePEc:eee:jmacro:v:30:y:2008:i:1:p:513-522
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    Cited by:

    1. Nicholas Apergis & John Sorros, 2013. "The role of fixed capital depreciations for TFP growth: evidence from firm level panel data estimates," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 37(4), pages 606-621, October.
    2. Gaowang Wang & Heng-fu Zou, 2010. "Multiple Equilibria and Indeterminacy in an Optimal Growth Model with Endogenous Capital Depreciation," CEMA Working Papers 392, China Economics and Management Academy, Central University of Finance and Economics.
    3. Ilmakunnas, Pekka & Miyakoshi, Tatsuyoshi, 2013. "What are the drivers of TFP in the Aging Economy? Aging labor and ICT capital," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 201-211.
    4. Tatsuyoshi Miyakoshi & Pekka Ilmakunnas, 2009. "What decreases the TFP ? The aging labor and ICT imbalance," Discussion Papers in Economics and Business 09-03, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).

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