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Abstract:

cover
CEP Discussion Paper
Integrated Estimates of Capital Stocks and Services for the United Kingdom: 1950-2013
Nicholas Oulton and Gavin Wallis
March 2015
Paper No' CEPDP1342:
Full Paper (pdf)

JEL Classification: E22; E23; D24; O47


Tags: capital services; capital stocks; rate of return; ex post; hybrid

This paper presents annual estimates of fixed capital stocks and capital services for the United Kingdom, 1950-2013, for the whole economy and for the market sector. Our estimates cover eight asset types (structures, machinery, vehicles, computers, purchased software, own-account software, mineral exploration and artistic originals) and also a ninth, R&D, from 1981 to 2013. We compare the effect on the estimates of capital services of using either an exogenous (ex post) rate of return or an endogenous one. The latter uses a model which allows for ex ante risk: firms’ expectations may not be satisfied so the realised rate of return may not be equalised across assets. We see how much the inclusion of R&D matters. We also look at what has happened to capital intensity (capital services per hour worked) in the Great Recession, a period when labour productivity fell in the UK. And we consider the evolution of the aggregate depreciation rate and of capital consumption as a proportion of GDP.