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Welcome to the revised OECD Manual Measuring Capital. This Manual should be of benefit to both producers and users of capital statistics.
The publication of the original Measuring Capital Manual in 2001 was a significant development in the statistical measurement of a vitally important component of economic activity. Capital plays a fundamental role in the process of production and it is a significant component of wealth and source of income. It is vital that both stock and flow aspects of capital are well measured in order to support the development and monitoring of economic policy, as well as economic analysis more generally. This revised edition of Measuring Capital builds on the original version, by taking account of new developments in capital measurement and ensuring consistency with the revised System of National Accounts – the 2008 SNA. -
This Manual benefitted significantly from contributions of members of the Canberra II Group on the measurement of non-financial assets and from thoughtful comments provided by national statistical offices, in particular Statistics Canada, the U.S Bureau of Economic Analysis, Statistics Netherlands, Eurostat and the German Federal Office of Statistics. Special thanks go to Erwin Diewert (University of British Columbia) and Koji Nomura (Cabinet Office of Japan and Keio University) for many insightful comments, corrections and suggestions of draft versions of the document. Thanks are also due to Dale Jorgenson (Harvard University) and Chuck Hulten (University of Maryland) for their support during the gestation period of the Manual. All errors remain with Paul Schreyer (OECD), the principle author of the document.
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It may be helpful to briefly recall the role that capital plays in a stylised system of national accounts. This can easily be done with a circular flow diagram, as shown in the figure below. Flows of quantities of goods and services are matched by monetary flows. In the simplest case with only consumers and producers, the basic exchange is between labour (hours worked) and consumer products. These are exchanged in the markets for labour and for consumer products and give rise to revenues and costs for producers, and expenditure and labour income for consumers. The flow of labour into the producer’s sector and the flow of consumption goods out of it signal a production process whose analysis is central to many economic questions.
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This Annex uses the formulae worked out in chapter 19 and presents them in a typical sequence of implementation. An artificial but not unrealistic dataset is used to demonstrate implementation. The purpose of this annex is to document the sequence of implementation, to demonstrate how to aggregate across sectors and industries and to examine the effects of using an ex-ante versus an ex-post approach when measuring user costs. The documented dataset with all the calculations is available in spreadsheet form on [URL here]. The data set has the following features:
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A full-fledged implementation of an integrated set of capital measures may be beyond the capacity of some statistical offices when, as a consequence of resourcing the statistical system, only the most basic information is available. This Annex presents a ‘minimum’ version of capital measures. Its objective is to sketch out a simplified method for capital measurement when the information basis is limited.
Investment series. Full implementation of the perpetual inventory method requires relatively long time series of gross fixed capital formation, broken down by type of asset and institutional sector or industrial activity. Such a data set may not be available. At a minimum, the following two-way classification for investment should be sought: sectoral dimension: GFCF carried out by government and by private sector and asset dimension: GFCF in machinery and equipment and in residential and non-residential structures.
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