NOTES ON THE MEASUREMENT OF REAL CAPITAL IN RELATION TO ECONOMIC PLANNING MODELS1

Leif Johansen and Age Sørsveen

Review of Income and Wealth, 1967, vol. 13, issue 2, 175-197

Abstract: Economic planning can in principle be seen as consisting of two phases: first a description of all possible development paths, and second a choice of “the best one” from among these possibilities. In the present paper the measurement of real capital is discussed in relation to the needs of the first of these two phases. In section 2 of the paper it is argued that the most relevant measure of capital for this purpose is the gross value of the existing capital stock, i.e. the total value without accounting for depreciation. In section 3 of the paper different ways of estimating this gross capital stock are discussed. In sections 4, 5 and 6 there follows a discussion of how one can correct the capital measures for changes in efficiency with age, for “embodied technical progress” and for different durabilities. The latter correction leads to concepts which are equivalent to measuring “capital services” as a factor of production. The treatment of maintenance and repair will be important for the interpretations of some of these “corrections.” The final section of the paper suggests a model which requires data on vintages of capital.

Date: 1967
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://doi.org/10.1111/j.1475-4991.1967.tb00739.x

Related works:
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:bla:revinw:v:13:y:1967:i:2:p:175-197

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0034-6586

Access Statistics for this article

Review of Income and Wealth is currently edited by Conchita D'Ambrosio and Robert J. Hill

More articles in Review of Income and Wealth from International Association for Research in Income and Wealth Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().