Endogenous depreciation, mismeasurement of aggregate capital, and the productivity slowdown

Toshihiko Mukoyama

Journal of Macroeconomics, 2008, vol. 30, issue 1, 513-522

Abstract: When we allow capital depreciation to be endogenous, the acceleration of investment-specific technological progress can distort the measurement of the aggregate capital stock. Our quantitative exercise shows that this effect may cause a substantial bias in the measurement of total factor productivity and can account for a large portion of the observed productivity slowdown since the 1970s.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:30:y:2008:i:1:p:513-522

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