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

31 Pages Posted: 21 Sep 2000 Last revised: 8 Oct 2010

See all articles by Milka S. Kirova

Milka S. Kirova

Saint Louis University - Department of Economics

Robert E. Lipsey

National Bureau of Economic Research (NBER) at New York (Deceased)

Date Written: February 1998

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

Kirova, Milka S. and Lipsey, Robert E., Measuring Real Investment: Trends in the United States and International Comparisons (February 1998). NBER Working Paper No. w6404. Available at SSRN: https://ssrn.com/abstract=226152

Milka S. Kirova

Saint Louis University - Department of Economics

Lindell Boulevard
Saint Louis, MO 63108
United States

Robert E. Lipsey (Contact Author)

National Bureau of Economic Research (NBER) at New York (Deceased)

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