Alternative User Costs, Productivity and Inequality in US Business Sectors

47 Pages Posted: 2 Jun 2017

See all articles by W. Erwin Diewert

W. Erwin Diewert

University of British Columbia (UBC) - Department of Economics; National Bureau of Economic Research (NBER)

Kevin J. Fox

UNSW Australia Business School, School of Economics

Date Written: May 30, 2017

Abstract

Using the new Bureau of Economic Analysis (BEA) Integrated Macroeconomic Accounts as well as other BEA data, we construct productivity accounts for two key sectors of the US economy: the Corporate Nonfinancial Sector (Sector 1) and the Noncorporate Nonfinancial Sector (Sector 2). Calculating user costs of capital based on, alternatively, ex post and predicted asset price inflation rates, we provide alternative estimates for capital services and Total Factor Productivity growth for the two sectors. Rates of return on assets employed are also reported for both sectors. In addition, we compare rates of return on assets employed and TFP growth rates when the land and inventory components are withdrawn from the asset base. Finally, implications for labour and capital shares from using alternative income concepts are explored.

Keywords: User Cost of Capital, Total Factor Productivity, Rate of Return on Assets, Integrated Macroeconomic Accounts, Bureau of Economic Analysis, Ex Post and Ex Ante Asset Inflation Rates, US Nonfinancial Sector, Austrian Model of Production, Balancing Rates of Return, Inequality

JEL Classification: B25, C43, C82, D24, E22, E43

Suggested Citation

Diewert, W. Erwin and Fox, Kevin J., Alternative User Costs, Productivity and Inequality in US Business Sectors (May 30, 2017). UNSW Business School Research Paper No. 2017 ECON 14. Available at SSRN: https://ssrn.com/abstract=2978451 or http://dx.doi.org/10.2139/ssrn.2978451

W. Erwin Diewert

University of British Columbia (UBC) - Department of Economics ( email )

997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada
604-822-2544 (Phone)
604-822-5915 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Kevin J. Fox (Contact Author)

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia
(02)9385-3320 (Phone)
(02)9313-6337 (Fax)

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