 Economic and statistical measurement of physical capital: From theory to practiceF.J. Escribá-Pérez, M.J. Murgui-García and José Ruiz-Tamarit Economic Modelling, 2018, vol. 75, issue C, 246-255 Abstract: The standard measurements of capital and depreciation are statistical measures based on assumptions about the average service life of capital goods, which are accumulated according to the perpetual inventory method. The purpose of this paper is to obtain a true economic measure of capital stock according to the prescriptions of the neoclassical theory. In this way, we develop an alternative method based on the equations that solve the dynamic optimization problem of the firm, yielding an economic estimation based on indicators of profitability, such as the distributed profits and the Tobin's q ratio. Thus, this method enables us to endogenously calculate the variables' rate of depreciation and capital stock. We apply this procedure to the Spanish economy, getting the series of an economic measure of depreciation and the economic value of capital stock. Our results show an economic depreciation rate that fluctuates around the statistical rate. Moreover, we get two time profiles for the economic and statistical capital stocks that differ significantly from each other. Keywords: Capital; Depreciation; Maintenance; Profitability; Tobin's q (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:75:y:2018:i:c:p:246-255 DOI: 10.1016/j.econmod.2018.06.023 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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