Working Paper: CEPR ID: DP15364
Authors: Leandro Prados de la Escosura
Abstract: The rising trend in the capital-output ratio and the productivity slowdown have put capital back in the economist’s agenda. This paper contributes to the debate by providing new estimates of net capital stock and services for Spain over the last 170 years. The net capital (wealth) stock-GDP ratio rose over time and doubled in the last half-a-century. Capital services grew fast over the long-run accelerating in the 1920s and from the mid-1950s to 2007. Until 1975 its acceleration was helped by an increase in the ‘quality’ of capital. Capital deepening proceeded steadily, accelerating during 1955-1985, and slowing down thereafter for expanding sectors attracted less investment-specific technological progress. Although capital consumption rose over time, the rate of depreciation fell from 1970 to 2007 as new capital goods’ relative prices declined due to embodied technological change.
Keywords: capital stock and services; capital deepening; capital-output ratio; Spain
JEL Codes: D24; E01; E22; N33; N34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| capital input (E22) | economic growth (O49) |
| capital deepening (E22) | productivity gains (O49) |
| net capital wealth stock (E22) | economic structure and wealth distribution (D31) |
| technological change (O33) | consumption of fixed capital (E20) |
| capital input growth (E22) | productivity (O49) |
| capital deepening (E22) | technological progress (O33) |