Capital stocks, capital services, and depreciation: an integrated framework
Neo-classical theory provides an integrated framework by means of which we can measure capital stocks, capital services and depreciation. In this paper the theory is set out and reviewed. It is found that the theory is quite robust and can deal with assets like computers that are subject to rapid obsolescence. Using the framework, estimates are presented of aggregate wealth, aggregate capital services and aggregate depreciation for the United Kingdom between 1979 Q1 and 2002 Q2, and the results are tested for sensitivity to the assumptions. The principal source of uncertainty in estimating capital stocks and capital services is found to relate to the treatment and measurement of investment in computers and software. Applying US methods for these assets to UK data has a substantial effect on the growth rate of capital services and on the ratio of depreciation to GDP.
|Date of creation:||Jun 2003|
|Date of revision:|
|Contact details of provider:|| Postal: Bank of England, Threadneedle Street, London, EC2R 8AH|
Phone: +44 (0)171 601 4030
Fax: +44 (0)171 601 5196
Web page: http://www.bankofengland.co.uk/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert E. Hall, 1999.
"The Stock Market and Capital Accumulation,"
NBER Working Papers
7180, National Bureau of Economic Research, Inc.
- Oliner, Stephen D, 1996. "New Evidence on the Retirement and Depreciation of Machine Tools," Economic Inquiry, Western Economic Association International, vol. 34(1), pages 57-77, January.
- Karl Whelan, 2002.
"Computers, obsolescence, and productivity,"
Open Access publications
10197/204, School of Economics, University College Dublin.
- Karl Whelan, 2000. "Computers, obsolescence, and productivity," Open Access publications 10197/244, School of Economics, University College Dublin.
- Karl Whelan, 2000. "Computers, obsolescence, and productivity," Finance and Economics Discussion Series 2000-06, Board of Governors of the Federal Reserve System (U.S.).
- Stephen D. Oliner, 1990. "Constant-quality price change, depreciation, and retirement of mainframe computers," Working Paper Series / Economic Activity Section 110, Board of Governors of the Federal Reserve System (U.S.).
- Paul Schreyer, 2001. "The OECD Productivity Manual: A Guide to the Measurement of Industry-Level and Aggregate Productivity," International Productivity Monitor, Centre for the Study of Living Standards, vol. 2, pages 37-51, Spring.
- Nicholas Oulton, 2002.
"ICT and Productivity Growth in the United Kingdom,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 18(3), pages 363-379.
- Martin L. Weitzman, 1976.
"On the Welfare Significance of National Product in a Dynamic Economy,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 90(1), pages 156-162.
- M. L. Weitzman, 1974. "On the Welfare Significance of National Product in Dynamic Economy," Working papers 125, Massachusetts Institute of Technology (MIT), Department of Economics.
- Chow, Gregory C & Lin, An-loh, 1971.
"Best Linear Unbiased Interpolation, Distribution, and Extrapolation of Time Series by Related Series,"
The Review of Economics and Statistics,
MIT Press, vol. 53(4), pages 372-75, November.
- Tom Doan, . "CHOWLIN: RATS procedure to distribute a series to a higher frequency using related series," Statistical Software Components RTS00036, Boston College Department of Economics.
- Tom Doan, . "DISAGGREGATE: RATS procedure to implement general disaggregation (interpolation/distribution) procedure," Statistical Software Components RTS00050, Boston College Department of Economics.
- Wadhwani, Sushil & Wall, Martin, 1986. "The UK Capital Stock--New Estimates of Premature Scrapping," Oxford Review of Economic Policy, Oxford University Press, vol. 2(3), pages 44-55, Autumn.
- Jorgenson, Dale W, 1996.
"Empirical Studies of Depreciation,"
Western Economic Association International, vol. 34(1), pages 24-42, January.
- Jorgenson, D.W., 1994. "Empirical Studies of Depriciation," Harvard Institute of Economic Research Working Papers 1704, Harvard - Institute of Economic Research.
- Larsen, Jens & Katharine Neiss & Fergal Shortall, 2002.
"Factor Utilisation and Productivity Estimates for the United Kingdom,"
Royal Economic Society Annual Conference 2002
120, Royal Economic Society.
- Jens Larsen & Katharine Neiss & Fergal Shortall, 2002. "Factor utilisation and productivity estimates for the United Kingdom," Bank of England working papers 162, Bank of England.
- Feldstein, Martin S & Rothschild, Michael, 1974. "Towards an Economic Theory of Replacement Investment," Econometrica, Econometric Society, vol. 42(3), pages 393-423, May.
- D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," Review of Economic Studies, Oxford University Press, vol. 34(3), pages 249-283.
- Berndt, Ernst R. & Fuss, Melvyn A., 1986. "Productivity measurement with adjustments for variations in capacity utilization and other forms of temporary equilibrium," Journal of Econometrics, Elsevier, vol. 33(1-2), pages 7-29.
- Hulten, Charles R. & Wykoff, Frank C., 1981. "The estimation of economic depreciation using vintage asset prices : An application of the Box-Cox power transformation," Journal of Econometrics, Elsevier, vol. 15(3), pages 367-396, April.
- Stephen D. Oliner, 1993. "Constant-Quality Price Change , Depreciation, and Retirement of Mainframe Computers," NBER Chapters, in: Price Measurements and Their Uses, pages 19-62 National Bureau of Economic Research, Inc.
- repec:sae:niesru:v:147:y::i:1:p:84-96 is not listed on IDEAS
- Oulton, Nicholas, 1995. "Depreciation, Obsolescence and the Role of Capital in Growth Accounting," Bulletin of Economic Research, Wiley Blackwell, vol. 47(1), pages 21-33, January.
- repec:ucp:bknber:9780226304557 is not listed on IDEAS
- Nicholas Oulton, 2002.
"Productivity versus welfare: or, GDP versus Weitzman's NDP,"
Bank of England working papers
163, Bank of England.
- Nicholas Oulton, 2004. "Productivity Versus Welfare; Or GDP Versus Weitzman's NDP," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(3), pages 329-355, 09.
- Dale W. Jorgenson & Kevin J. Stiroh, 2000.
"Raising the Speed Limit: U.S. Economic Growth in the Information Age,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 31(1), pages 125-236.
- Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: US Economic Growth in the Information Age," OECD Economics Department Working Papers 261, OECD Publishing.
- W. Erwin Diewert, 1980. "Aggregation Problems in the Measurement of Capital," NBER Chapters, in: The Measurement of Capital, pages 433-538 National Bureau of Economic Research, Inc.
- Hulten, Charles R & Wykoff, Frank C, 1996. "Issues in the Measurement of Economic Depreciation: Introductory Remarks," Economic Inquiry, Western Economic Association International, vol. 34(1), pages 10-23, January.
When requesting a correction, please mention this item's handle: RePEc:boe:boeewp:192. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Digital Media Team)
If references are entirely missing, you can add them using this form.