Measuring Capital Services in the United Kingdom

15 Pages Posted: 26 Jul 2005

See all articles by Nicholas Oulton

Nicholas Oulton

London School of Economics - Centre for Macroeconomics(CFM)


For many macroeconomic purposes, such as the study of productivity or the assessment of capacity utilisation, we need measures of the level and growth rate of the productive services that the capital stock is capable of providing. The official estimates of the capital stock produced by the Office for National Statistics aim to be measures of wealth, not capital services. So while they are appropriate for their intended purposes, such as balance sheet analysis, they may not be appropriate for productivity analysis or in measures of capacity utilisation. This article discusses the theory behind a different concept of capital, called here the volume index of capital services (VICS), and presents estimates of the VICS for the United Kingdom - based on both a five-asset breakdown and an eight-asset breakdown - for the period 1979-99. The eight-asset breakdown includes three information and communications technology (ICT) assets: computers, software and telecommunications equipment. The VICS measure has grown faster than the wealth measures, and the divergence is more apparent when ICT assets are included explicitly.

Suggested Citation

Oulton, Nicholas, Measuring Capital Services in the United Kingdom. Bank of England Quarterly Bulletin, Autumn 2001, Available at SSRN:

Nicholas Oulton (Contact Author)

London School of Economics - Centre for Macroeconomics(CFM) ( email )

Houghton Street
London WC2A 2AE
United Kingdom

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