Munich Personal RePEc Archive

Public Capital, Internal Rate of Return and Growth Accounting

Mas, Matilde (2005): Public Capital, Internal Rate of Return and Growth Accounting. Published in: EU KLEMS Note (2005)


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The note raises some methodological problems derived from the presence of public capital. It follows closely Jorgenson and Landfeld (2004) proposal of modifying Gross Value Added and Gross Operating Surplus figures provided by National Accounts, since public capital services are underestimated. Making use of the Spanish data we conclude that Spanish NA figures underestimate GVA and GOS in approximately 4% and 9% respectively with the gap increasing since the middle of the nineties. However, the rates of growth are not that different. Finally, growth accounting results show slightly higher contributions of capital and TFP to output growth when the alternative approach is applied.

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