 A Short-Cut Method of Estimating Capital Stocks: When Can It be Used and How Well Does It Work?Derek Blades Review of Income and Wealth, 2015, vol. 61, issue 2, 373-393 Abstract: type="main"> Relatively few countries currently publish estimates of capital stocks because of the difficulty of applying the Perpetual Inventory Method. A short-cut method which we term the Steady Growth Model (SGM) can produce plausible capital stock estimates provided certain conditions are met. Starting with a database covering 146 countries we conclude that the SGM can legitimately be used to calculate capital stocks for 53 of them. The 53 include equal numbers of high-income and low-income countries. The SGM requires only data on gross fixed capital formation for the base year, information about past growth rates of real GFCF, and assumptions about rates of depreciation. Despite its apparent simplicity, we show that our SGM stock estimates compare well with official stock estimates generated by the PIM. Other tests on capital–output ratios and capital-stocks per head confirm the plausibility of stock estimates generated by SGM. Date: 2015 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:revinw:v:61:y:2015:i:2:p:373-393 Ordering information: This journal article can be ordered from 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. |
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