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Public Capital, Internal Rate of Return and Growth Accounting

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  • Mas, Matilde

Abstract

The note raises some methodological problems derived from the presence of public capital. It follows closely Jorgenson and Landfeld (2004) proposal of modifying Gross Value Added and Gross Operating Surplus figures provided by National Accounts, since public capital services are underestimated. Making use of the Spanish data we conclude that Spanish NA figures underestimate GVA and GOS in approximately 4% and 9% respectively with the gap increasing since the middle of the nineties. However, the rates of growth are not that different. Finally, growth accounting results show slightly higher contributions of capital and TFP to output growth when the alternative approach is applied.

Suggested Citation

  • Mas, Matilde, 2005. "Public Capital, Internal Rate of Return and Growth Accounting," MPRA Paper 15821, University Library of Munich, Germany, revised 2005.
    • Handle: RePEc:pra:mprapa:15821
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    File URL: https://mpra.ub.uni-muenchen.de/15821/1/MPRA_paper_15821.pdf
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    References listed on IDEAS

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    1. Brent R. Moulton, 2004. "The system of national accounts for the new economy: What should change?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(2), pages 261-278, June.
    2. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2005. "Growth of US Industries and Investments in Information Technology and Higher Education," NBER Chapters, in: Measuring Capital in the New Economy, pages 403-478, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Toma Lankauskienė, 2016. "Application of the growth accounting method for the construction industry," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 17(3), pages 430-443, June.

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    More about this item

    Keywords

    Public Capital; Capital Services; Growth Accouting;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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