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Measuring real investment: trends in the United States and international comparisons

Author

Listed:
  • Milka Kirova
  • Robert E. Lipsey

Abstract

The standard measures of nominal capital formation suggest that the proportion of GDP the United States is dedicating to investment has been much lower than that of other developed countries throughout the last 25 years. By calculating the measures in real terms across countries and over time, authors Milka S. Kirova and Robert E. Lipsey show that the U.S. investment ratios have been rising over time, coming increasingly closer to those of other countries. Using a broader measure of capital formation that is more consonant with economic concepts, they show that U.S. investment has been close to that of other countries since 1970 and was an above-average share of total output in the most recent period studies (1990-94). Their calculations indicate that, broadly defined, real capital formation per capita and per worker has been 30 to 60 percent higher in the United States than in the other countries studied.

Suggested Citation

  • Milka Kirova & Robert E. Lipsey, 1998. "Measuring real investment: trends in the United States and international comparisons," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 3-18.
  • Handle: RePEc:fip:fedlrv:y:1998:i:jan:p:3-18
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    References listed on IDEAS

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    1. Horioka, Charles Yuji, 1995. "Is Japan's Household Saving Rate Really High?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 41(4), pages 373-397, December.
    2. repec:ucp:bkecon:9780226301532 is not listed on IDEAS
    3. Milton Friedman & Simon Kuznets, 1954. "Income from Independent Professional Practice," NBER Books, National Bureau of Economic Research, Inc, number frie54-1.
    4. Fumio Hayashi, 1986. "Why Is Japan's Saving Rate So Apparently High?," NBER Chapters,in: NBER Macroeconomics Annual 1986, Volume 1, pages 147-234 National Bureau of Economic Research, Inc.
    5. Milka Kirova & Robert E. Lipsey, 1997. "Does the United States invest "too little?"," Working Papers 1997-020, Federal Reserve Bank of St. Louis.
    6. Peter Hooper & J. David Richardson, 1991. "International Economic Transactions: Issues in Measurement and Empirical Research," NBER Working Papers 3805, National Bureau of Economic Research, Inc.
    7. Eisner, Robert, 1989. "The Total Incomes System of Accounts," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226196381, April.
    8. Peter Hooper & J. David Richardson, 1991. "International Economic Transactions: Issues in Measurement and Empirical Research," NBER Books, National Bureau of Economic Research, Inc, number hoop91-1.
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    Citations

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    Cited by:

    1. J. David Richardson, 2006. "Comment on "Measuring International Trade in Services"," NBER Chapters,in: International Trade in Services and Intangibles in the Era of Globalization, pages 71-74 National Bureau of Economic Research, Inc.
    2. Mireille Laroche & Marcel Mérette & G. C. Ruggeri, 1999. "On the Concept and Dimension of Human Capital in a Knowledge-Based," Canadian Public Policy, University of Toronto Press, vol. 25(1), pages 87-100, March.
    3. Richard W. Kopcke & Richard S. Brauman, 2001. "The performance of traditional macroeconomic models of businesses' investment spending," New England Economic Review, Federal Reserve Bank of Boston, pages 3-39.
    4. J. David Richardson & Chi Zhang, 1999. "Revealing Comparative Advantage: Chaotic or Coherent Patterns Across Time and Sector and U.S. Trading Partner?," NBER Working Papers 7212, National Bureau of Economic Research, Inc.
    5. Magnus Blomström & Linda S. Goldberg, 2001. "Introduction to "Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey"," NBER Chapters,in: Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey, pages 1-14 National Bureau of Economic Research, Inc.
    6. Herbert Walther & Alfred Stiassny, 2013. "International Comparisons of Household Saving Rates and Hidden Income," Department of Economics Working Papers wuwp148, Vienna University of Economics and Business, Department of Economics.

    More about this item

    Keywords

    Investments;

    JEL classification:

    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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