The Embodiment of Intangible Investment Goods : a Q-Theory Approach / Nazim Belhocine.

Format:

Book

Government document

Author/Creator:

Belhocine, Nazim.

Contributor:

International Monetary Fund. Western Hemisphere Dept.

Series:

IMF Working Papers; Working Paper ; No. 2010/086

IMF Working Papers

Language:

English

Subjects (All):

Investments--United States.

Investments.

Stockholders--United States.

Stockholders.

Physical Description:

1 online resource (64 p.)

Place of Publication:

Washington, D.C. : International Monetary Fund, 2010.

Summary:

This paper extends the q-theory of investment to model explicitly the decision of firms to invest in intangibles and measures the contribution of intangible goods to the overall capital stock in the U.S. The model highlights the embodiment of intangible goods in tangibles and the role of relative price movements in the measurement of the contribution of each type of investment to the overall capital stock. The downward trend in the aggregate investment deflator series reported by national accounts is found to have a significant downward bias in the 90s. The model also shows that the growth in the overall capital stock from the late-80s until 2000 was driven mainly by an increase in the contribution of intangibles. However, the contribution of intangibles fell consistently after 2000. These results underscore the importance of accounting for the movements in the price of intangibles rather than focusing only on their rising share in overall investment.

Contents:

Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Contrast with Other Approaches; 1. Net Value of Securities and Value of Capital Stock (in billions); 2. Behavior of Tobin's q; III. Including Intangibles in the Q-theory of Investment; IV. Calibration; A. Constant Parameters; 1. Parameter values; B. Varying Parameters; 3. Real Mean Earnings of University Graduates; 4. Real Mean Compensation of Executives (in thousands); 5. Real Wages and Price of Intangible Investment Goods; 6. Share of Intangible Expenditure in Overall Investment Expenditure

7. Real Price of Investment GoodsV. Quantitative Findings and Results; A. Behavior of the Stock of Capital; 8. The Aggregate Value of Firms and the Inferred Capital Stock; B. Contribution of Intangibles and Tangibles to Capital Stock; 9. The Contributions to the Inferred Capital Stock; C. Implications for Tobin's q Series; 10. Behavior of Tobin's q; VI. Comparison of Findings with Existing Literature; A. Reframing Hall (2001); B. Reframing McGrattan and Prescott (2007a); C. Models' Comparison; D. Comparison of Findings; 11. Comparison of findings with Hall (2001)

12. Impact of Different Values of the EoS on the Price of Composite Investment GoodVII. Sensitivity Analysis; 2. Sensitivity of the Contribution of Intangibles; A. Allowing for Different Elasticity of Substitution Values; B. Allowing for Different Wage Series; 13. Impact of Different Wage Series on Price of Composite Investment Good; VIII. Conclusion; Appendix; References; Footnotes

Notes:

"April 2010."

Includes bibliographical references (p. 35-37).

Description based on print version record.

ISBN:

9786612845772

9781462304288

1462304281

9781452734910

1452734917

9781282845770

1282845772

9781451982626

1451982623

OCLC:

867926801