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Capital formation and capital stock in Indonesia, 1950-2008


  • Pierre van der Eng


This article presents long-term estimates of gross fixed capital formation, disaggregated by category of productive assets, for the period 1951-2008. These data, combined with approximations of probable average asset lives and a plausible asset retirement procedure, are used in a perpetual inventory method framework to estimate gross fixed capital stock in Indonesia for the years 1950-2008, disaggregated by productive asset category. Total capital stock grew significantly from the late 1960s, at about 10% per year, until the 1997-98 economic crisis. The high capital-output ratio in 1997 suggests that a significant part of Indonesia's rapid economic growth during the 1990s was due to capital accumulation.

Suggested Citation

  • Pierre van der Eng, 2009. "Capital formation and capital stock in Indonesia, 1950-2008," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 45(3), pages 345-371.
  • Handle: RePEc:taf:bindes:v:45:y:2009:i:3:p:345-371 DOI: 10.1080/00074910903301662

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    References listed on IDEAS

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    8. Jorge Garcia Garcia & Lana Soelistianingsih, 1998. "Why Do Differences in Provincial Incomes Persist in Indonesia?," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 34(1), pages 95-120.
    9. Arsenio Balisacan & Ernesto Pernia & Abuzar Asra, 2003. "Revisiting growth and poverty reduction in Indonesia: what do subnational data show?," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 39(3), pages 329-351.
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    Cited by:

    1. Kelfala M. Kallon, 2013. "Growth Empirics: Evidence from Sierra Leone," African Development Review, African Development Bank, vol. 25(2), pages 215-230, June.
    2. Ian Coxhead & Rashesh Shrestha, 2016. "Could a Resource Export Boom Reduce Workers’ Earnings? The Labour-Market Channel in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 52(2), pages 185-208, May.
    3. van der Eng, Pierre, 2010. "The sources of long-term economic growth in Indonesia, 1880-2008," Explorations in Economic History, Elsevier, vol. 47(3), pages 294-309, July.

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