Capital Formation and Capital Stock in Indonesia, 1950-2007

Pierre van der Eng ()

Departmental Working Papers from Australian National University, Economics RSPAS

Abstract: This paper presents long-term estimates of gross fixed capital formation for 1951-2007 that are disaggregated by categories of productive assets. These data, combined with approximations of probable average asset lives and a feasible asset retirement method are used in a Perpetual Inventory Method to estimate gross fixed capital stock in Indonesia for 1950-2007 disaggregated by productive assets. Most of Indonesia’s capital stock long consisted of residential and non-residential structures. Total capital stock grew significantly since the late-1960s at about 10% per year, until the 1997-98 economic crisis. The high capital-output ratio in 1997 suggests that part of Indonesia’s high economic growth during the 1990s was due to unsustainable resource accumulation.

Keywords: investment; capital formation; capital stock; economic growth; Indonesia (search for similar items in EconPapers)
JEL-codes: E22 E43 N15 O11 O47 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-his, nep-mac and nep-sea
Date: Written
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Persistent link: http://EconPapers.repec.org/RePEc:pas:papers:2008-24

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