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The Treatment Of Intangible Resources As Capital

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  • John W. Kendrick

Abstract

The author describes the results of his current research designed to measure total investment, tangible and intangible, and the derived capital stocks for the U.S., 1929–1966. With respect to total investment, the estimates show a marked increase in its ratio to GNP. All of the increase occurs in the intangible component comprising R & D, education and training, health, and mobility. The increase was concentrated in the government sector, although households increased the proportion of disposable personal income devoted to total investment. Consistent with the relative investment trends, the stock of intangible capital grew considerably faster than the tangible stock. The growth of total capital stocks was somewhat less than that of GNP, however, in both current and constant prices. Thus, the rate of return on total capital rose somewhat over the period. Average rates of return on human and nonhuman capital were closely similar. In real terms, the growth of total capital stocks accounted for two‐thirds of the growth in real GNP, 1929–1966. One‐third of the growth is attributed to residual forces, chiefly economies of scale, changes in inherent quality of human and natural resources, changes in values and motivations, and changes in rates of utilization of capacity. The growth of the ratio of real intangible stocks to real tangible stocks accounted for less than half of the increase in total factor productivity 1929–1966. This is significantly less than the contribution of intangibles as estimated by Denison, and the author adduces several reasons why his estimates may understate the contribution. Nevertheless, it seems that the net effect of the residual forces enumerated above must also have made a substantial contribution to the growth of tangible factor productivity and real GNP over the 37‐year period.

Suggested Citation

  • John W. Kendrick, 1972. "The Treatment Of Intangible Resources As Capital," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 18(1), pages 109-125, March.
  • Handle: RePEc:bla:revinw:v:18:y:1972:i:1:p:109-125
    DOI: 10.1111/j.1475-4991.1972.tb00853.x
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    Cited by:

    1. Cornelia Serena, PASCA, 2016. "The Human Capital - A Long Term Investment," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 1(4), pages 51-62.
    2. André Vanoli, 1978. "Les notions de consommation élargie," Économie et Statistique, Programme National Persée, vol. 100(1), pages 55-63.
    3. Albu, Lucian-Liviu, 1991. "Le Rapport Industrie - Agriculture Et Le Developpement Economique [Industry-Agriculture Relationship and Economic Development]," MPRA Paper 20660, University Library of Munich, Germany.
    4. Anne Wyatt & Hermann Frick, 2010. "Accounting for Investments in Human Capital: A Review," Australian Accounting Review, CPA Australia, vol. 20(3), pages 199-220, September.
    5. Webster, Elizabeth, 2000. "The growth of enterprise intangible investment in Australia," Information Economics and Policy, Elsevier, vol. 12(1), pages 1-25, March.
    6. Albu, Lucian-Liviu, 1986. "Un modèle d’analyse de la modification structurelle des investissements par stades de développement économique [A model to analyse structural changes of investment by economic development stages]," MPRA Paper 13919, University Library of Munich, Germany.

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