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http://ssrn.com/abstract=943769
 
 

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Intangible Capital and Economic Growth


Carol A. Corrado


The Conference Board; Georgetown University - Center for Business and Public Policy

Daniel E. Sichel


Wellesley College; NBER

Charles R. Hulten


University of Maryland - Department of Economics; National Bureau of Economic Research (NBER)

June 2006

FEDS Working Paper No. 2006-24

Abstract:     
Published macroeconomic data traditionally exclude most intangible investment from measured GDP. This situation is beginning to change, but our estimates suggest that as much as $800 billion is still excluded from U.S. published data (as of 2003), and that this leads to the exclusion of more than $3 trillion of business intangible capital stock. To assess the importance of this omission, we add intangible capital to the standard sources-of-growth framework used by the BLS, and find that the inclusion of our list of intangible assets makes a significant difference in the observed patterns of U.S. economic growth. The rate of change of output per worker increases more rapidly when intangibles are counted as capital, and capital deepening becomes the unambiguously dominant source of growth in labor productivity. The role of multifactor productivity is correspondingly diminished, and labor's income share is found to have decreased significantly over the last 50 years.

Number of Pages in PDF File: 52

Keywords: Economic growth, investment, intangibles, capital, productivity, economic measurement

JEL Classification: O47, E22, E01

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Date posted: November 10, 2006  

Suggested Citation

Corrado, Carol A. and Sichel, Daniel E. and Hulten, Charles R., Intangible Capital and Economic Growth (June 2006). FEDS Working Paper No. 2006-24. Available at SSRN: http://ssrn.com/abstract=943769 or http://dx.doi.org/10.2139/ssrn.943769

Contact Information

Carol A. Corrado (Contact Author)
The Conference Board ( email )
845 Third Avenue
New York, NY 10022
United States
202-340-0252 (Phone)
Georgetown University - Center for Business and Public Policy ( email )
Washington, DC 20057
United States
HOME PAGE: http://cbpp.georgetown.edu
Daniel E. Sichel
Wellesley College ( email )
106 Central St.
Wellesley, MA 02181
United States
NBER ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Charles R. Hulten
University of Maryland - Department of Economics ( email )
College Park, MD 20742
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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