Almost all attempts to construct capital stock data base on some variant of the Perpetual Inventory Method. While various countries employ this method to construct suitable proxies of national capital stocks, the implementation and the underlying assumptions differ considerably, thereby rendering the results internationally incomparable. Only a few attempts to construct internationally comparable capital stock data have yet been undertaken in the scientific literature. In this paper we outline the idea of the Perpetual Inventory Method and deliver a survey of previous implementations of the method. Based on a critical assessment of these implementations we propose a unified approach and construct estimations of aggregate capital stocks for the 1970 to 2010 period for 103 countries.
Based on new estimates of public and private capital stocks for 22 OECD countries we study the dynamic effect of public capital on the real gross domestic product using a vector autoregression approach. Whereas most former studies put effort on examining the effects of public capital in a single country, this paper covers a large set of OECD countries. The results show that public capital has a positive effect on output in the short-, medium- and long-run in most countries. In countries where the effect is negative, possible explanations as the different productivities of investments, crowding out or high growth rates of government debt are analyzed.
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