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How Important Is Technology Capital for the United States?

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  • Marek Kapička

Abstract

I construct measures of technology capital and country openness for the US economy and the rest of the world for 1982-2007. The key identifying assumption is that firms equalize returns on tangible and technology capital. For the US economy, technology capital is about one-third of tangible capital, and the degree of openness is between 0.61 and 0.70. I provide both a two-country estimation and a multicountry estimation, and find that the US estimates are almost identical in both cases. The welfare loss from totally closing the US economy is small, but the welfare gain from totally opening the US economy is large. (JEL E22, F41, O30)

Suggested Citation

  • Marek Kapička, 2012. "How Important Is Technology Capital for the United States?," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(2), pages 218-248, April.
    • Handle: RePEc:aea:aejmac:v:4:y:2012:i:2:p:218-48
    Note: DOI: 10.1257/mac.4.2.218
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    References listed on IDEAS

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    Cited by:

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    2. Clausen, Saskia & Hirth, Stefan, 2016. "Measuring the value of intangibles," Journal of Corporate Finance, Elsevier, vol. 40(C), pages 110-127.
    3. Menno, Dominik, 2014. "Multinational Firms and Business Cycle Transmission," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100320, Verein für Socialpolitik / German Economic Association.
    4. Klein, Paul & Ventura, Gustavo, 2021. "Taxation, expenditures and the Irish miracle," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 1062-1077.

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    More about this item

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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