THE PRODUCTION AND USE OF ICT IN FINLAND, 19752001生产和使用信息和通信技术在芬兰、19752001.pptVIP

CAPITAL AND ITS PRODUCTIVITY IN FINLAND, 1975-2001 Pirkko Aulin-Ahmavaara Jukka Jalava Statistics Finland / Helsinki School of Economics Capital’s role in growth The fundamental role of capital known at least since the physiocrat Turgot and Adam Smith alternative explanations of economic growth, Crafts (1992): exogenous growth endogenous growth institutions catching-up K usually denotes both the value of capital and its input into production, which both are assumed to decline by the same depreciation rate δ Capital in the national accounts Gross Capital Stock, no adjustments for loss of efficiency due to aging. Capital goods stay in the stock until they are retired at the end of their service lives. Gross capital stock at the end of year is estimated using the perpetual inventory method pioneered by Goldsmith (1951): where d is the surviving share of the cohort of capital goods that are s years old in year t and S is the maximum service life of the asset type. Capital in the national accounts II Net Capital Stock, depicts the market value of capital and not its productive capacity. The net value of the capital good equals the current purchaser’s price of a new asset of the same type less the cumulated consumption of fixed capital (SNA93, para.6.199). Capital services Jorgenson Griliches (‘67) showed that it is important to take into account the substitution between different kinds of capital (and labour). Hence, capital services should be used as capital input in growth accounting. We calculate productive capital stocks for each homogeneous asset type: Productive capital stock is (when we are assuming a geometric age-efficiency profile): i.e. if Kt-1 is 100, the rate of depreciation is 0,05 and the new investment is 10, then Kt is 100*(1-0,05)+10 = 105 This was for a single capital asset type, and when we aggregate several asset types into a measure of capital services, their Hall-Jorgenson (‘67) user costs are used as weights. User cost of capit