Working Paper: NBER ID: w0448
Authors: Martin Feldstein
Abstract: The purpose of the present study is to measure the extent to which an increase in the total capital stock induces an increase in the stock of residential capital, i.e., to measure the marginal propensity of additional capital to be absorbed in residential capital. A knowledge of this propensity is important to evaluate the national return on additional saving and to understand the impact that an increased capital stock could have on labor productivity and on the composition of national output. The present paper provides both a theoretical and an empirical examination of this question.
Keywords: capital stock; residential capital; industrial capital
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| total capital stock (E22) | residential capital (R38) |
| increase in total capital stock (E22) | increase in residential capital (R31) |
| total capital stock (E22) | industrial capital (L60) |
| total capital stock (E22) | marginal share of housing in total capital (D33) |