Intangible capital and economic growth

Carol Corrado, Charles R. Hulten and Daniel Sichel ()

No 2006-24, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Published macroeconomic data traditionally exclude most intangible investment from measured GDP. This situation is beginning to change, but our estimates suggest that as much as $800 billion is still excluded from U.S. published data (as of 2003), and that this leads to the exclusion of more than $3 trillion of business intangible capital stock. To assess the importance of this omission, we add intangible capital to the standard sources-of-growth framework used by the BLS, and find that the inclusion of our list of intangible assets makes a significant difference in the observed patterns of U.S. economic growth. The rate of change of output per worker increases more rapidly when intangibles are counted as capital, and capital deepening becomes the unambiguously dominant source of growth in labor productivity. The role of multifactor productivity is correspondingly diminished, and labor's income share is found to have decreased significantly over the last 50 years.

Keywords: Economic development; Capital; Labor productivity (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-mac and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (119)

Downloads: (external link)
http://www.federalreserve.gov/pubs/feds/2006/200624/200624abs.html (text/html)
http://www.federalreserve.gov/pubs/feds/2006/200624/200624pap.pdf (application/pdf)

Related works:
Journal Article: INTANGIBLE CAPITAL AND U.S. ECONOMIC GROWTH (2009)
Working Paper: Intangible Capital and Economic Growth (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2006-24

Access Statistics for this paper

More papers in Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ; Keisha Fournillier ().