NBER WORKING PAPER SERIES
MEASURING REAL INVESTMENT:TRENDS IN THE UNITED STATES
AND INTERNATIONAL COMPARISONS
Milka S. KirovaRobert E. Lipsey
Working Paper 6404http://www.nber.org/papers/w6404
NATIONAL BUREAU OF ECONOMIC RESEARCH1050 Massachusetts
Avenue
Cambridge, MA 02138February 1998
The authors thank Bill Dewald for valuable discussions during
the work on this article. We also thankPatricia Pollard and Peter
Yoo for helpful comments, and Charles Horioka for providing the
data onconsumer durables in Japan. Eran Segev and Ewa Wojas
provided research assistance. Any opinionsexpressed are those of
the authors and not those of the National Bureau of Economic
Research.
© 1998 by Milka S. Kirova and Robert E. Lipsey. All rights
reserved. Short sections of text, not toexceed two paragraphs, may
be quoted without explicit permission provided that full credit,
including© notice, is given to the source.Measuring Real
Investment: Trends in the United
States and International ComparisonsMilka S. Kirova and Robert
E. LipseyNBER Working Paper No. 6404February 1998JEL Nos. C8, E21,
E22
ABSTRACT
The standard measures of nominal capital formation show the
United States investing a
proportion of GDP much lower than those of other developed
countries throughout the last 25 years
and falling further behind over time. In contrast, measures we
have calculated in real terms across
countries and over time indicate that US investment ratios have
been rising over time and have been
coming closer and closer to those of the other countries.
A broader measure of capital formation more consonant with
economic concepts shows the
United States to have been close to the other countries since
1970 and to have been investing an
above average share of total output in the most recent period
1990-1994. Real capital formation per
capita and per worker, even conventionally defined, has been
consistently between 15 and 25 percent
higher than in the other countries and broadly defined real
capital formation per capita and per worker
has been 30 to 60 percent higher.
Milka S. Kirova Robert E. LipseyDepartment of Economics National
Bureau of Economic ResearchSchool of Business and Administration 50
East 42nd Street, 17th FloorSaint Louis University New York, NY
10017-54053674 Lindell Boulevard [email protected]. Louis, MO
63108
