Rents and Intangible Capital: A Q+ Framework / Nicolas Crouzet, Janice C. Eberly.

Format:

Book

Author/Creator:

Crouzet, Nicolas.

Contributor:

National Bureau of Economic Research.

Eberly, Janice C.

Series:

Working Paper Series (National Bureau of Economic Research) no. w28988.

NBER working paper series no. w28988

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

In recent years, US investment has been lackluster, despite rising valuations. Key explanations include growing rents and growing intangibles. We propose and estimate a framework to quantify their roles. The gap between valuations -- reflected in average Q -- and investment -- reflected in marginal q -- can be decomposed into three terms: the value of installed intangibles; rents generated by physical capital; and an interaction term, measuring rents generated by intangibles. The intangible-related terms contribute significantly to the gap, particularly in fast-growing sectors. Our findings suggest care in a pure-rents interpretation, given the rising role of intangibles.

Notes:

Print version record

July 2021.