Download This PaperShould Capital Input Data Receive a Utilization Adjustment?
46 Pages Posted: 10 Mar 2008 Last revised: 3 Nov 2009
Date Written: November 1, 2009
Abstract
A common procedure in productivity research is to use estimates of the stocks of physical capital as proxies for service flows. A number of authors propose cyclical adjustments for capital input which, if large enough, will eliminate findings of procyclicality in the behavior of TFP. This paper argues that for the preponderance of assets in the fixed capital stock, fluctuations in utilization have little effect on user costs. In the aggregate, adjustments to capital input data for utilization should consequently be small, much smaller, for example, than those suggested by Solow (1957), Griliches and Jorgenson (1966), Tatom (1980), Shapiro (1993), or Basu and Fernald. (2000).
Keywords: TFP, Productivity, Cycles
JEL Classification: E32, O47, N12
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Quality-Adjusted Prices for the American Automobile Industry: 1906-1940
-
Uncontrolled Land Development and the Duration of the Depression in the United States
-
American Living Standards, 1888-1994: Evidence from Consumer Expenditures
-
Not What it Used to Be: The Cambridge Economic History of the United States, Volumes II and III
-
The Relative Productivity of American Distribution, 1869-1992