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Measuring Depreciation For Japan: Rejoinder to Dekle and Summers

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  • Fumio Hayashi

Abstract

Recently, my claim that depreciation reported in the Japanese national accounts is underestimated by a substantial margin has been challenged by Dekle and Summers (NBER Working Paper No. 3690), on the ground that the implied depreciation rate (ratio of depreciation to the capital stock) is implausibly high. I argue in this rejoinder that Japan's high depreciation rate can be attributable to two factors. First, the depreciation rate for owner-occupied housing is much higher in Japan. Second, equipment capital (a component of the denominator in the depreciation rate) in the Japanese national accounts seems underestimated. Therefore, my estimate of the level of depreciation for Japan does not seem exaggerated.

Suggested Citation

  • Fumio Hayashi, 1991. "Measuring Depreciation For Japan: Rejoinder to Dekle and Summers," NBER Working Papers 3836, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3836
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    1. Fumio Hayashi, 1986. "Why Is Japan's Saving Rate So Apparently High?," NBER Chapters, in: NBER Macroeconomics Annual 1986, Volume 1, pages 147-234, National Bureau of Economic Research, Inc.
    2. Jorgenson, Dale W. & Kuroda, Masahiro & Nishimizu, Mieko, 1987. "Japan-U.S. industry-level productivity comparisons, 1960-1979," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 1-30, March.
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    Cited by:

    1. Yoshida, Jiro, 2020. "The economic depreciation of real estate: Cross-sectional variations and their return implications," Pacific-Basin Finance Journal, Elsevier, vol. 61(C).
    2. Selahattin Imrohoroglu & Ayse Imrohoroglu & Kaiji Chen, 2006. "The Japanese Saving Rate," American Economic Review, American Economic Association, vol. 96(5), pages 1850-1858, December.
    3. Lopez, Luis A. & Yoshida, Jiro, 2022. "Estimating housing rent depreciation for inflation adjustments," Regional Science and Urban Economics, Elsevier, vol. 95(C).

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