A new econometric model for measuring fixed capital flows and stocks - ARCHIVED
Articles and reports: 61-532-X19970013501
Conventional models of physical depreciation only measure the quantity side of Fixed Capital Flows and Stocks (FCFAS). An additional weakness of these models is that the quantity values for all FCFAS are obtained by deflating all the items behind the FCFAS using only one deflator that of gross fixed capital formation. Furthermore, conventional models make arbitrary assumptions on both physical and economic depreciation. Because conventional models do not measure the price side of FCFAS, it is very difficult to fit the economic depreciation variable into the models; it is probably wrongly fitted into the models in all the cases.
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|February 2, 1998|