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Measuring Real Investment: Trends in the United States and International Comparisons

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  • Milka S. Kirova
  • Robert S. Lipsey

Abstract

The standard measures of nominal capital formation show the United States investing a proportion of GDP much lower than those of other developed countries throughout the last 25 years and falling further behind over time. In contrast, measures we have calculated in real terms across countries and over time indicate that US investment ratios have been rising over time and have been coming closer and closer to those of the other countries. A broader measure of capital formation more consonant with economic concepts shows the United States to have been close to the other countries since 1970 and to have been investing an above average share of total output in the most recent period 1990-1994. Real capital formation per capita and per worker, even conventionally defined, has been consistently between 15 and 25 percent higher than in the other countries and broadly defined real capital formation per capita and per worker has been 30 to 60 percent higher.

Suggested Citation

  • Milka S. Kirova & Robert S. Lipsey, 1998. "Measuring Real Investment: Trends in the United States and International Comparisons," NBER Working Papers 6404, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:6404
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    References listed on IDEAS

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    Cited by:

    1. John Devereux & Zadia M. Feliciano, 2013. "Robert E. Lipsey," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(2), pages 375-380, June.
    2. Walther, Herbert & Stiassny, Alfred, 2013. "International Comparisons of Household Saving Rates and Hidden Income," Department of Economics Working Paper Series 148, WU Vienna University of Economics and Business.
    3. J. David Richardson, 2006. "Comment on "Measuring International Trade in Services"," NBER Chapters, in: International Trade in Services and Intangibles in the Era of Globalization, pages 71-74, National Bureau of Economic Research, Inc.
    4. Mireille Laroche & Marcel Mérette & G. C. Ruggeri, 1999. "On the Concept and Dimension of Human Capital in a Knowledge-Based," Canadian Public Policy, University of Toronto Press, vol. 25(1), pages 87-100, March.
    5. Magnus Blomström & Linda S. Goldberg, 2001. "Introduction to "Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey"," NBER Chapters, in: Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey, pages 1-14, National Bureau of Economic Research, Inc.
    6. Herbert Walther & Alfred Stiassny, 2013. "International Comparisons of Household Saving Rates and Hidden Income," Department of Economics Working Papers wuwp148, Vienna University of Economics and Business, Department of Economics.
    7. Richard S. Brauman & Richard W. Kopcke, 2001. "The performance of traditional macroeconomic models of businesses' investment spending," New England Economic Review, Federal Reserve Bank of Boston, pages 3-39.
    8. J. David Richardson & Chi Zhang, 1999. "Revealing Comparative Advantage: Chaotic or Coherent Patterns Across Time and Sector and U.S. Trading Partner?," NBER Working Papers 7212, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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