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Capital Stock (capital + stock)
Kinds of Capital Stock Selected AbstractsTHE RELATIONSHIP BETWEEN CAPITAL STOCK, UNEMPLOYMENT AND WAGES IN NINE EMU COUNTRIESBULLETIN OF ECONOMIC RESEARCH, Issue 2 2007Philip Arestis E00; E22; E24 ABSTRACT The focus of this paper is to investigate the importance of the capital stock in the determination of wages and unemployment in a range of EMU countries and to compare the results across countries. A time-series analysis is conducted in the case of nine euro area countries, which were selected solely on the basis of data availability and consistency: Austria, Belgium, Finland, France, Germany, Italy, Ireland, the Netherlands and Spain. The paper begins with a short review of the literature on capital stock and unemployment, before it deals with the theoretical model. This is followed by estimation and testing of the theoretical model put forward, using both time-series and panel data. The results are supportive of the main hypothesis of the paper: capital stock is an important determinant of unemployment and wages in the countries considered for the purposes of the paper. [source] Investment in Fixed Capital Stock: Testing for the Impact of Sectoral and Systemic Uncertainty*OXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 2 2004Johannes Fedderke Abstract This paper applies current theory recognizing the irreversibility of investment, in order to test for the impact of uncertainty on investment expenditure for a middle income country. The contribution of the paper is unique in two respects. First, it employs dynamic heterogeneous panel estimation techniques not previously applied to investment functions. Secondly, it explicitly tests for the impact of both sectoral and systemic uncertainty on investment expenditure. We find that both sectoral (as measured by output volatility) and systemic uncertainty (as measured by political instability) have a negative impact on investment rates in a middle income country context. Liquidity constraints and growth in total factor productivity are found to have no impact on investment, while trade liberalization has the impact predicted by Heckscher-Ohlin trade theory. Finally, we find complementarity effects between physical capital and skilled human capital, suggesting that South African educational policies may have hampered investment in physical capital as well as the growth performance of the economy. Policy implications emphasize the importance of lowering uncertainty for investors, and the need for sound human capital investment. [source] Monetary Policy with an Endogenous Capital Stock When Inflation is PersistentTHE MANCHESTER SCHOOL, Issue S1 2002Richard Mash The paper presents a monetary policy model with an endogenous capital stock when a backward,looking element in wage setting causes inflation persistence. We analyse how the endogeneity of the capital stock changes the macroeconomic dynamics with which policy interacts and its implications for optimal policy and time inconsistency. Capital stock endogeneity makes inflation more persistent in reduced form. This makes the optimal contemporaneous policy response to shocks more vigorous but the subsequent return to steady state more gradual. Observed output becomes more serially correlated. Capital endogeneity can also give rise to disinflation bias under discretion for some parameter values. [source] Commentary: Familiness: Capital Stocks and Flows Between Family and BusinessENTREPRENEURSHIP THEORY AND PRACTICE, Issue 6 2008Pramodita Sharma First page of article [source] Liquidity Constraints and Firms' Investment Return BehaviourECONOMICA, Issue 276 2002Parantap Basu We construct a production-based model, which compares the investment return behaviour of liquidity-constrained firms with that of unconstrained firms. The key testable implication that emerges from the model is that the investment returns of the constrained firms are predictable, while those of the unconstrained firms are not. We test this implication indirectly, verifying whether the capital stock and investment returns of the latter firms lead those of the former, and directly, via the estimation of an Euler equation. Our results are consistent with the model's prediction. [source] On the Dynamics of Basic Growth Models: Ratio Stability vs.GERMAN ECONOMIC REVIEW, Issue 4 2009Convergence, Divergence in State Space Balanced growth; convergence; divergence; state space dynamics; ratio stability Abstract. We show for a class of basic growth models that convergence in ratios does not imply the pathwise convergence to the corresponding balanced growth path in the state space. We derive conditions on parameters and on the elasticity of the savings function for convergence or divergence and apply our results to the Solow model, an augmented Solow model as well as to an optimal growth model. An implication for the convergence debate is that two economies that differ only in the initial capital stock and converge in per capita terms might diverge to infinity in absolute terms. [source] Pension Reform, Capital Markets and the Rate of ReturnGERMAN ECONOMIC REVIEW, Issue 2 2003Axel Börsch-Supan Aging; pension reform; rates of return Abstract. This paper discusses the consequences of population aging and a fundamental pension reform , that is, a shift towards more pre-funding , for capital markets in Germany. We use a stylized closed-economy, overlapping-generations model to compare the effects of the recent German pension reform with those of a more decisive reform that would freeze the current pay-as-you-go contribution rate and thus result in a larger funded component of the pension system. We predict rates of return to capital under both reform scenarios over a long horizon, taking demographic projections as given. Our main finding is that the future decrease in the rate of return is much smaller than often claimed in the public debate. Our simulations show that the capital stock will decrease once the baby-boom generations enter retirement, even if there were no fundamental pension reform. The corresponding decrease in the rate of return, the direct effect of population aging, is around 0.7 percentage points. While the capital market effects of the recent German pension reform are marginal, the rate of return to capital would decrease by an additional 0.5 percentage points under the more decisive reform proposal. [source] Falling Labor Share and Rising Unemployment: Long,Run Consequences of Institutional Shocks?GERMAN ECONOMIC REVIEW, Issue 4 2002Norbert Berthold The literature on unemployment has mostly focused on labor market issues while the impact of capital formation is largely neglected. Job creation is often thought to be a matter of encouraging more employment on a given capital stock. In contrast, this paper explicitly deals with the long,run consequences of institutional shocks on capital formation and employment. It is shown that the usual tradeoff between employment and wages disappears in the long run. In line with an appropriation model, the estimated values for the long,run elasticities of substitution between capital and labor for Germany and France are substantially greater than one. [source] Union Wage Setting and Capital Income Taxation in Dynamic General EquilibriumGERMAN ECONOMIC REVIEW, Issue 2 2001Thomas Aronsson This paper concerns the effects of capital income taxation in a dynamic general equilibrium framework with union wage setting, when households face taxes related to both labor and capital. One purpose is to characterize the general equilibrium solution. Another is to study the effects of increased capital income taxation , in terms of the responses in real wages, employment, capital stock, output and consumption , and relate these behavioral responses to the overall tax structure. We also derive a cost,benefit rule for the purpose of analyzing the welfare effects of a small shift from labor income taxation to capital income taxation. [source] How leveraging human resource capital with its competitive distinctiveness enhances the performance of commercial and public organizationsHUMAN RESOURCE MANAGEMENT, Issue 4 2005Abraham Carmeli Although scholars agree that complex relationships between organizations' actual human resources (i.e., human capital stock) and means of leveraging these resources may influence performance, little empirical work has tested such propositions directly. We collected two primary data sets from privateand public-sector organizations in Israel. The multiplicative interaction between perceived human resources capital and distinctive value derived from that HR capital was significantly related to various measures of perceived and objective organizational performance. Having higher levels of human resources capital was strongly associated with performance only when top managers perceived that these resources provided distinctive value in terms of being highly valuable, inimitable, rare, and nonsubstitutable. We discuss the implications of these findings for research on strategic human resource management and the resource-based view of competitive advantage, as well as for practical efforts to develop firm-specific human resource capital that is inherently distinctive. © 2005 Wiley Periodicals, Inc. [source] On sustained economic growth with wealth effectsINTERNATIONAL JOURNAL OF ECONOMIC THEORY, Issue 1 2010Santanu Roy O4; D9 In a discounted one-sector convex model of optimal economic growth where utility may depend on both consumption and capital stock, I derive necessary and sufficient conditions for sustained growth (unbounded expansion of capital and consumption). Conditions for bounded growth and extinction are also outlined. Optimal paths may be non-monotone. Sustained growth may occur even though the asymptotic marginal productivity is less than the discount rate and may require the initial capital stock to be above a critical level. The behavior of the marginal rate of substitution between consumption and capital plays a crucial role in the conditions. [source] A new production function estimate of the euro area output gap,JOURNAL OF FORECASTING, Issue 1-2 2010Matthieu Lemoine Abstract We develop a new version of the production function (PF) approach for estimating the output gap of the euro area. Assuming a CES (constant elasticity of substitution) technology, our model does not call for any (often imprecise) measure of the capital stock and improves the estimation of the trend total factor productivity using a multivariate unobserved components model. With real-time data, we assess this approach by comparing it with the Hodrick,Prescott (HP) filter and with a Cobb,Douglas PF approach with common cycle and implemented with a multivariate unobserved components model. Our new PF estimate appears highly concordant with the reference chronology of turning points and has better real-time properties than the univariate HP filter for sufficiently long time horizons. Its inflation forecasting power appears, like the other multivariate approach, less favourable than the statistical univariate method. Copyright © 2009 John Wiley & Sons, Ltd. [source] Analyzing Polyvinyl Chloride in Japan With the Waste Input,Output Material Flow Analysis ModelJOURNAL OF INDUSTRIAL ECOLOGY, Issue 5 2009Shinichiro Nakamura Summary Effective life cycle management of polyvinyl chloride (PVC) calls for the separation of end-of-life PVC products at the time of collection not only from other wastes but among different PVC types as well. Information about the flow of PVC products in the economy is important for this purpose. Within the framework of the Japanese input,output (IO) table for the year 2000, with around 400 industry sectors, the flow of PVC is captured in terms of six PVC-embodying products and in terms of three PVC types, (1) flexible PVC (soft PVC), (2) rigid PVC (hard PVC), and (3) others. The degree of resolution; the consideration of different PVC types, which are seldom performed in the material flow analysis (MFA) literature; and the use of waste input,output material flow analysis (WIO-MFA) represent distinguishing features of our study. The use of WIO-MFA methodology enables one to convert a monetary input,output table into a physical interindustry flow table involving an arbitrary number of materials under full consideration of the mass balance. The results indicate that 40% of the PVC produced in Japan is exported (as resins and as products such as passenger motor cars), and the rest is accumulated mostly as capital stock. The largest share of accumulation goes to public construction in the form of plates, pipes, and bars, which are mostly hard-PVC products. [source] Pollution Abatement Investment When Environmental Regulation Is UncertainJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 2 2000Y.H. Farzin In a dynamic model of a risk-neutral competitive firm that can lower its pollution emissions per unit of output by building up abatement capital stock, we examine the effect of a higher pollution tax rate on abatement investment both under full certainty and when the timing or the size of the tax increase is uncertain. We show that a higher pollution tax encourages abatement investment if it does not exceed a certain threshold rate. However, akin to the Diamond-Mirrlees tax anomaly, it is possible that a higher pollution tax rate results in more pollution. The magnitude uncertainty discourages abatement investment, but at the time of the actual tax increase the abatement investment path may shift either upward or downward. On the other hand, when the timing is uncertain, the abatement investment path always jumps upward, thus suggesting that the effect of magnitude uncertainty on the optimal investment path may be more pronounced than that of timing uncertainty. Further, we show that the ad hoc practice of raising the discount rate to account for the uncertainty leads to underinvestment in abatement capital. We show how the size of this underinvestment bias varies with the future tax increase. Finally, we show that a credible threat to accelerate the tax increase can induce more abatement investment. [source] An Introduction to Spatial DiscountingJOURNAL OF REGIONAL SCIENCE, Issue 1 2001Charles Perrings Research on the valuation of environmental externalities shows that decision makers tend to discount not only over time but across space. Just as time discounting has implications for intergenerational equity, geographical or spatial discounting has implications for intragenerational equity. Similarly, just as positive time discount rates are warranted by positive net rates of growth of the capital stock, positive spatial discount rates may be warranted by the fact that enviironmental (or other external effects of economic activity are diffused at positive rates. This paper introduces the notion of spatial discounting and explores its welfare implications through a simple diffusion model. [source] The Regional Allocation of Public Investment: Efficiency or Equity?JOURNAL OF REGIONAL SCIENCE, Issue 2 2000Norihiko Yamano In this paper we examine the effect of public investment on the regional economies of Japan. The efficient policy for regional allocation of public capital is to invest in highly productive regions, whereas the actual policy pursues equity goals by allocating more public investment to depressed regions. We determine the effects of this equity- oriented allocation by estimating the aggregate regional production function and calculating the productivity of public capital stock for each region, using a cross-sectional time-series data set. Our results show that the marginal productivity of public capital has recently declined in most depressed regions, whereas the productivity in developed regions (e.g., Tokyo, Osaka) has increased slightly. We compare alternative policies of allocating public investment and their effects on the regional and national economies using numerical simulations. We then quantitatively describe the trade-off between the efficient and the equitable allocation of public investment. [source] The Interaction of Human and Physical Capital Accumulation: Evidence from Sub-Saharan Africa,KYKLOS INTERNATIONAL REVIEW OF SOCIAL SCIENCES, Issue 2 2005Robin Grier Summary In this paper, a simultaneous model of the evolution of human and physical capital in Sub-Saharan Africa is estimated. It can be shown that the two types of capital are jointly endogenous, in that increases in human capital significantly raise the per-worker physical capital stock, and increases in the physical capital significantly raise primary education levels. Unlike the implications of other recent papers, there is no evidence that tropical climates and ethnic diversity have a negative effect on the accumulation of capital in the region. [source] Capital Services Growth in the UK: 1950 to 2006,OXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 6 2009Gavin Wallis Abstract This paper describes a capital services dataset for the United Kingdom developed for use in empirical work, and some of its key features. The estimates are consistent with National Accounts output estimates, making them ideal for use in growth-accounting or business-cycle analysis. The divergence between the volume of capital services and the volume of the capital stock after 1980 is highlighted. This divergence is driven by a shift in investment towards short-lived and more productive information and communication technology assets for which the flow of capital services is high. Standard capital stock measures understate growth in the productive input of capital, especially after 1990. [source] The Impact of Simple Institutions in Experimental Economies with Poverty Traps,THE ECONOMIC JOURNAL, Issue 539 2009C. Mónica Capra We introduce an experimental approach to study the effect of institutions on economic growth. In each period, agents produce and trade output in a market, and allocate it to consumption and investment. Productivity is higher if total capital stock is above a threshold. The threshold externality generates two steady states , a suboptimal ,poverty trap' and an optimal steady state. In a baseline treatment, the economies converge to the poverty trap. However, the ability to make public announcements or to vote on competing and binding policies, increases output, welfare and capital stock. Combining these two simple institutions guarantees that the economies escape the poverty trap. [source] MERGERS WITH SUPPLY FUNCTIONSTHE JOURNAL OF INDUSTRIAL ECONOMICS, Issue 4 2004ur Akgün I analyze the equilibrium effects of a merger in an industry when firms compete by submitting supply functions. Under the assumptions that the industry capital stock is fixed and production costs are quadratic and decreasing in capital, I find that any merger results in all firms reducing supply. The decrease in supply by non-participating firms makes any merger profitable. A merger from a symmetric industry lowers welfare. [source] The Evolution of the Financial Contract in Economic DevelopmentTHE MANCHESTER SCHOOL, Issue 2 2004Niloy Bose This paper presents an analysis of the joint determination of real and financial development. The analysis is based on a simple endogenous growth model in which a borrower's risk type is private information. Our innovation is to determine jointly the equilibrium loan contract and the economy's growth path. We show that at a low level of development an economy is likely to experience a large incidence of credit rationing. As capital accumulates, credit rationing may fall as a result of the emergence of a new contract regime in which agents mitigate information friction by making use of available information. This change in behaviour results in a higher capital accumulation path and a higher steady-state capital stock. [source] Monetary Policy with an Endogenous Capital Stock When Inflation is PersistentTHE MANCHESTER SCHOOL, Issue S1 2002Richard Mash The paper presents a monetary policy model with an endogenous capital stock when a backward,looking element in wage setting causes inflation persistence. We analyse how the endogeneity of the capital stock changes the macroeconomic dynamics with which policy interacts and its implications for optimal policy and time inconsistency. Capital stock endogeneity makes inflation more persistent in reduced form. This makes the optimal contemporaneous policy response to shocks more vigorous but the subsequent return to steady state more gradual. Observed output becomes more serially correlated. Capital endogeneity can also give rise to disinflation bias under discretion for some parameter values. [source] The Impact of APROC on Taiwan's Economy: A CGEAnalysis of DeregulationASIAN ECONOMIC JOURNAL, Issue 1 2002Shiu-Tung Wang The Taiwan Government defines the Asia-Pacific Regional Operations Center (APROC) project as designed ,to transform Taiwan into a regional economic center through overall liberalization and internationalization'. From this definition and the targets of APROC as set by the Taiwan Government, it is not difficult to see that deregulation is one of the basic means of achieving its goals. In this paper, we use a computable general equilibrium (CGE) model to evaluate the possible effects of this deregulation. The effects of deregulation on the economy go through four channels in the model: (i) deregulation liberalizes the market; (ii) deregulation moderates factor market distortion; (iii) deregulation attracts foreign investment, speeds up capital accumulation and enlarges capital stock in Taiwan; and (iv) deregulation attracts foreign investment and hence improves technology. Six simulations are conducted in this paper. All of the simulations show positive effects on Taiwan's economy as a whole, while for individual sectors the effects are various. [source] Measuring the Impact of Doi Moi on Vietnam's Gross Domestic ProductASIAN ECONOMIC JOURNAL, Issue 3 2000Le Thanh Nghiep In 1986 a wide range of policy measures, known as Doi Moi, was introduced to promote Vietnam's transition to a market economy. This paper represents the first attempt to measure the effect of Doi Moi on Vietnam's GDP. In the paper the level of GDP actually reached is compared with the level that would have been reached had the policy not been implemented, i.e. without the improvements in productivity and the increases in investment ratio that can be directly attributed to Doi Moi. Cross-time changes in GDP were depicted by a production function of capital stock, economically active labour force and technical progress. It was found that, after a time lag, Doi Moi appeared to have a significant positive effect on productivity, which by 1998 accounted for a 42% increase in GDP. [source] THE RELATIONSHIP BETWEEN CAPITAL STOCK, UNEMPLOYMENT AND WAGES IN NINE EMU COUNTRIESBULLETIN OF ECONOMIC RESEARCH, Issue 2 2007Philip Arestis E00; E22; E24 ABSTRACT The focus of this paper is to investigate the importance of the capital stock in the determination of wages and unemployment in a range of EMU countries and to compare the results across countries. A time-series analysis is conducted in the case of nine euro area countries, which were selected solely on the basis of data availability and consistency: Austria, Belgium, Finland, France, Germany, Italy, Ireland, the Netherlands and Spain. The paper begins with a short review of the literature on capital stock and unemployment, before it deals with the theoretical model. This is followed by estimation and testing of the theoretical model put forward, using both time-series and panel data. The results are supportive of the main hypothesis of the paper: capital stock is an important determinant of unemployment and wages in the countries considered for the purposes of the paper. [source] Measuring Human Capital Like Physical Capital: What Does It Tell Us?BULLETIN OF ECONOMIC RESEARCH, Issue 3 2002Ruth Judson In this paper, I develop a measure of human capital stock that is similar to measuring physical capital by its replacement cost. This measure builds on measures of average educational attainment of the labour force. While it is far from an ideal measure, it is an interesting complement to the educational attainment series and other existing measures of human capital accumulation. In cross,country panel regressions, use of this measure of human capital accumulation yields a positive and significant, but relatively small (about ten per cent) elasticity with percapita GDP growth. Unlike physical capital, the stock of human capital as a share of GDP increases with GDP. This is consistent with the Barro et al. (1995) model of growth with non,mobile human capital and with some predictions of Romer's (1990) model of endogenous growth, but it is not consistent with the predictions of some other growth models. [source] PROPOSAL FOR A NEW MEASURE OF CORRUPTION, ILLUSTRATED WITH ITALIAN DATAECONOMICS & POLITICS, Issue 1 2005Miriam A. Golden Standard cross-national measures of corruption are assembled through surveys. We propose a novel alternative objective measure that consists of the difference between a measure of the physical quantities of public infrastructure and the cumulative price government pays for public capital stocks. Where the difference is larger between the monies spent and the existing physical infrastructure, more money is being siphoned off to mismanagement, fraud, bribes, kickbacks, and embezzlement; that is, corruption is greater. We create this measure for Italy's 95 provinces and 20 regions as of the mid-1990s, controlling at the regional level for possible differences in the costs of public construction. [source] Public Investment in Europe: Evolution and Determinants in perspective,FISCAL STUDIES, Issue 4 2006Aaron Mehrotra Abstract We describe the evolution of public investment and public capital stocks in Europe over the past three decades. Against this background, we analyse the macroeconomic determinants of public investment, with a special focus on its long-term trend. We find that public investment has been determined by national income, the stance of budgetary policies and fiscal sustainability considerations. Neither the cost of financing nor the fiscal rules embodied in EMU have had a systemic impact on public investment. The significant downtrend that characterises the evolution of public investment in non-cohesion countries is chiefly determined by drawn-out episodes of fiscal consolidation, unrelated to EMU. [source] The Phelps,Koopmans theorem and potential optimalityINTERNATIONAL JOURNAL OF ECONOMIC THEORY, Issue 1 2010Debraj Ray D90; O41 The Phelps,Koopmans theorem states that if every limit point of a path of capital stocks exceeds the "golden rule," then that path is inefficient: there is another feasible path from the same initial stock that provides at least as much consumption at every date and strictly more consumption at some date. I show that in a model with nonconvex technologies and preferences, the theorem is false in a strong sense. Not only can there be efficient paths with capital stocks forever above and bounded away from a unique golden rule, such paths can also be optimal under the infinite discounted sum of a one-period utility function. The paper makes clear, moreover, that this latter criterion is strictly more demanding than the efficiency of a path. [source] Short and long-run returns to agricultural R&D in South Africa, or will the real rate of return please stand up?AGRICULTURAL ECONOMICS, Issue 1 2000David Schimmelpfennig Abstract This paper briefly presents the results of a total factor productivity (TFP) study of South African commercial agriculture, for 1947-1997, and illustrates some potential pitfalls in rate of return to research (ROR) calculations. The lag between R&D and TFP is analyzed and found to be only 9 years, with a pronounced negative skew, reflecting the adaptive focus of the South African system. The two-stage approach gives a massive ROR of 170%. The predetermined lag parameters are then used in modeling the knowledge stock, to refine the estimates of the ROR from short- and long-run dual profit functions. In the short run, with the capital inputs treated as fixed, the ROR is a more reasonable 44%. In the long run, with adjustment of the capital stocks, it rises to 113%, which would reflect the fact that new technology is embodied in the capital items. However, the long-run model raises a new problem since capital stock adjustment takes 11 years, 2 years longer than the lag between R&D and TFP. If this is assumed to be the correct lag, the ROR falls to 58%, a best estimate. The paper draws attention to the possible sensitivity of rate of return calculations to assumed lag structure, particularly when the lag between changes in R&D and TFP is skewed. [source] | ||||||||||||||||||||||||||||