Estimated U.S. Manufacturing Production Capital and Technology Based on an Estimated Dynamic Economic Model

Baoline Chen and Peter A. Zadrozny

No CESifo Working Paper No. 1526, CESifo Working Paper Series from CESifo Group Munich

Abstract: Production capital and technology, fundamental to understanding output and productivity growth, are unobserved except at disaggregated levels and must be estimated prior to being used in empirical analysis. We develop and apply a new estimation method, based on advances in economics, statistics, and applied mathematics, which involves estimating a structural dynamic economic model of a representative production firm and using the estimated model to compute Kalman-filtered estimates of capital and technology for the sample period. We apply the method to annual data from 1947-97 for U.S. total manufacturing and compare the estimates with those reported by the Bureau of Labor Statistics.

Keywords: Kalman; filter; estimation; of; unobserved; state; variables (search for similar items in EconPapers)
JEL-codes: C50 C81 D24 L60 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff
Date: 2005
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