OECD Statistics Working Papers
The OECD Statistics Working Paper Series - managed by the OECD Statistics and Data Directorate – is designed to make available in a timely fashion and to a wider readership selected studies prepared by staff in the Secretariat or by outside consultants working on OECD projects. The papers included are of a technical, methodological or statistical policy nature and relate to statistical work relevant to the organisation. The Working Papers are generally available only in their original language - English or French - with a summary in the other.
Joint Working Papers:
Testing the evidence, how good are public sector responsiveness measures and how to improve them? (with OECD Public Governance Directorate)
Measuring Well-being and Progress in Countries at Different Stages of Development: Towards a More Universal Conceptual Framework (with OECD Development Centre)
Measuring and Assessing Job Quality: The OECD Job Quality Framework (with OECD Directorate for Employment, Labour and Social Affairs)
Forecasting GDP during and after the Great Recession: A contest between small-scale bridge and large-scale dynamic factor models (with OECD Economics Directorate)
Decoupling of wages from productivity: Macro-level facts (with OECD Economics Directorate)
Which policies increase value for money in health care? (with OECD Directorate for Employment, Labour and Social Affairs)
Compiling mineral and energy resource accounts according to the System of Environmental-Economic Accounting (SEEA) 2012 (with OECD Environment Directorate)
- ISSN: 18152031 (online)
- https://doi.org/10.1787/18152031
Sensitivity of capital and MFP measurement to asset depreciation patterns and initial capital stock estimates
This paper discusses the sensitivity of capital and multifactor productivity (MFP) measurement to asset depreciation patterns and initial capital stock estimates. Applying the same depreciation rates in the US as in other G7 countries would reduce the US net investment rate and net capital stock by up to one third and increase US GDP by up to 0.5%. Capital and MFP growth would be less affected. Estimating initial capital stocks often involves assuming constant investment growth, but this leads to unreliable results. Relying on average K/Y ratios across countries works well for the US, but this might not be the case for other countries due to the international dispersion in K/Y ratios. Two main recommendations for statistical agencies emerge from this analysis. First, they should regularly review asset depreciation patterns to ensure that measured differences across countries are well justified. Second, they should backcast investment series as much as possible before relying on stationarity assumptions to estimate initial capital stocks.
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