New Estimates of Government Net Capital Stocks for 22 OECD Countries 1960-2001

Capital services estimates in Portuguese industries, 1977–2003

“…With respect to depreciation rates, and following Schreyer et al (2003), we 21 See OECD (2001bOECD ( , 2009. 22 The choice of the 4% rate, similarly to Kamps (2006) and Pina and St. Aubyn (2004), is justified on the grounds that it is a reasonable order of magnitude for a long-term macroeconomic series. 23 Given the volatility of investment figures we use the average value of investment between 1977 and 1979, rather than the value of investment observed at the beginning of the period under analysis, as in Kamps (2006).…”

“…However, reliable information of this type is very hard to find (particularly for the Portuguese case), and therefore most studies (e.g., Osada 1994;Timmer 1999;Kamps 2006) rely on indirect shortcut methods for this purpose. In the present study we follow Kamps (2006) and Pina and St. Aubyn (2004), constructing artificial investment series starting in 1877 by assuming an initial value of capital stock at zero and a constant rate of investment increase (4% per annum) 22 from that year to the average of investment values observed between 1977 and 1979. 23 Capital stocks were obtained considering the previously indicated assumptions regarding efficiency decay, the shape of the survival function and asset lives.…”

“…40 Under these circumstances, we had to rely on an artificial procedure in order to generate the initial stocks required for the estimation of capital services measures. In Section 3 we followed the method suggested by Kamps (2006), constructing artificial investment series for the period 1877-1976 as an input for the estimation of the initial capital stocks. Kamps (2006) shows that assuming a constant 4% growth rate instead of using the historical investment growth rates of the US economy over the period 1914-1959 does not significantly affect the resulting capital stock series.…”

“…In Section 3 we followed the method suggested by Kamps (2006), constructing artificial investment series for the period 1877-1976 as an input for the estimation of the initial capital stocks. Kamps (2006) shows that assuming a constant 4% growth rate instead of using the historical investment growth rates of the US economy over the period 1914-1959 does not significantly affect the resulting capital stock series. Furthermore, formal tests for equality between the means and the variances of both series fail to reject the null hypothesis of equality.…”

“…The determination of the capital services series in the previous section was based on three major assumptions: (1) the age-efficiency profile was assumed to follow a hyperbolic pattern, (2) initial capital stocks were generated using the methodology suggested by Kamps (2006), and (3) service lives of assets were taken from other countries' estimates, mostly Statistics Netherlands. This section assesses the impact of these assumptions by estimating alternative capital services series, which are obtained modifying in turn each of the three assumptions.…”