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Net Capital Stock and Capital Productivity for China and Regions: 1960-2005. An Optimal Consistency Method

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  • Jose Miguel Albala-Bertrand

    (Queen Mary, University of London)

Abstract

This analysis is based on the optimal consistency method (OCM) proposed by Albala-Bertrand (2003), which enables to estimate a capital stock for a benchmark year. This method, in contrast to most current approaches, pays due regards both to potential output and to the productivity of capital. From an initial OCM benchmark estimate, we produce series for the net capital stock, via a perpetual inventory method (PIM), for all China and some useful regional disaggregations over the 45-year period 1960-2005. As a by-product, we also make available the optimal productivities of incremental or "marginal" capital, corresponding to the net accumulated GFCF over 5-year sub-periods from 1960 onwards. We then attempt some structural analysis, showing that the quantity of resources rather than their quality appears to be largely behind growth rates, especially since the 1990s.

Suggested Citation

  • Jose Miguel Albala-Bertrand, 2007. "Net Capital Stock and Capital Productivity for China and Regions: 1960-2005. An Optimal Consistency Method," Working Papers 610, Queen Mary University of London, School of Economics and Finance.
    • Handle: RePEc:qmw:qmwecw:610
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    File URL: https://www.qmul.ac.uk/sef/media/econ/research/workingpapers/2007/items/wp610.pdf
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    References listed on IDEAS

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    1. J. M. Albala-Bertrand, 2007. "Relative Capital Shortage and Potential Output Constraint: A Gap Approach," International Review of Applied Economics, Taylor & Francis Journals, vol. 21(2), pages 189-205.
    2. Robert M. Solow, 1994. "Perspectives on Growth Theory," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 45-54, Winter.
    3. Holz, Carsten A., 2006. "New capital estimates for China," China Economic Review, Elsevier, vol. 17(2), pages 142-185.
    4. Raymond W. Goldsmith, 1951. "A Perpetual Inventory of National Wealth," NBER Chapters, in: Studies in Income and Wealth, Volume 14, pages 5-73, National Bureau of Economic Research, Inc.
    5. Hofman, Andre A, 2000. "Standardised Capital Stock Estimates in Latin America: A 1950-94 Update," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 24(1), pages 45-86, January.
    6. Jose Miguel Albala-Bertrand, 2003. "An Economical Approach to Estimate a Benchmark Capital Stock. An Optimal Consistency Method," Working Papers 503, Queen Mary University of London, School of Economics and Finance.
    7. Charles R. Hulten, 1992. "Growth Accounting When Technical Change is Embodied in Capital," NBER Working Papers 3971, National Bureau of Economic Research, Inc.
    8. André A. Hofman, 2000. "The Economic Development of Latin America in the Twentieth Century," Books, Edward Elgar Publishing, number 1534.
    9. Jose Miguel Albala-Bertrand, 2003. "An Economical Approach to Estimate a Benchmark Capital Stock. An Optimal Consistency Method," Working Papers 503, Queen Mary University of London, School of Economics and Finance.
    10. Chow, Gregory & Lin, An-loh, 2002. "Accounting for Economic Growth in Taiwan and Mainland China: A Comparative Analysis," Journal of Comparative Economics, Elsevier, vol. 30(3), pages 507-530, September.
    11. Hulten, Charles R, 1992. "Growth Accounting When Technical Change Is Embodied in Capital," American Economic Review, American Economic Association, vol. 82(4), pages 964-980, September.
    12. Holz, Carsten A., 2006. "Response to Gregory C. Chow's "New Capital Estimates for China: Comments"," China Economic Review, Elsevier, vol. 17(2), pages 193-197.
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    Cited by:

    1. He, Yiming & Fullerton, Thomas M. & Walke, Adam G., 2017. "Electricity consumption and metropolitan economic performance in Guangzhou: 1950–2013," Energy Economics, Elsevier, vol. 63(C), pages 154-160.
    2. Mazouch, P. & Krejčí, I., 2016. "The Analysis of the Age Structure of Regional Fixed Capital in the Agriculture," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 8(2), pages 1-13, June.
    3. Jose Miguel Albala-Bertrand, 2013. "Evolution of Structural Indicators. China and Regions: 1981-2010," Working Papers 701, Queen Mary University of London, School of Economics and Finance.
    4. J.M. Albala-Bertrand, 2018. "Structural Change behind GDP Growth Rates via Key Indicators: Chile 1996-2015," International Business Research, Canadian Center of Science and Education, vol. 11(8), pages 38-47, August.
    5. Jose Miguel Albala-Bertrand, 2013. "Evolution of Structural Indicators. China and Regions: 1981-2010," Working Papers 701, Queen Mary University of London, School of Economics and Finance.

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    More about this item

    Keywords

    China; Benchmark capital; Perpetual Inventory Method (PIM); Potential output; Capital productivity; Optimal Consistency Method (OCM); Structural analysis;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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