Estimated U.S. Manufacturing Production Capital and Technology Based on an Estimated Dynamic Economic Model

48 Pages Posted: 28 Sep 2005

See all articles by Baoline Chen

Baoline Chen

Bureau of Economic Analysis

Peter A. Zadrozny

U.S. Bureau of Labor Statistics - Department of Labor; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: August 2005

Abstract

Production capital and technology, fundamental to understanding output and productivity growth, are unobserved except at disaggregated levels and must be estimated prior to being used in empirical analysis. We develop and apply a new estimation method, based on advances in economics, statistics, and applied mathematics, which involves estimating a structural dynamic economic model of a representative production firm and using the estimated model to compute Kalman-filtered estimates of capital and technology for the sample period. We apply the method to annual data from 1947-97 for U.S. total manufacturing and compare the estimates with those reported by the Bureau of Labor Statistics.

Keywords: Kalman filter estimation of unobserved state variables

JEL Classification: C50, C81, D24, L60

Suggested Citation

Chen, Baoline and Zadrozny, Peter A., Estimated U.S. Manufacturing Production Capital and Technology Based on an Estimated Dynamic Economic Model (August 2005). CESifo Working Paper Series No. 1526. Available at SSRN: https://ssrn.com/abstract=812311

Baoline Chen

Bureau of Economic Analysis ( email )

1441 L Street, NW
Washington, DC 20230
United States
2026069676 (Phone)
2026065366 (Fax)

Peter A. Zadrozny (Contact Author)

U.S. Bureau of Labor Statistics - Department of Labor ( email )

2 Massachusetts Avenue, NE
Washington, DC 20212
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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