Ex post versus ex ante measures of the user cost of capital
By: Nicholas Oulton.
Series: Discussion paper ;; no. 698; Discussion paper (London School of Economics and Political Science. Centre for Economic Performance : Online) ;; no. 698.
Publisher: Centre for Economic Performance, London School of Economics and Political Science
Published: 2005
Place of publication: [London]
Language: eng
Format: Electronic resource
Description: "When doing growth accounting, should we use ex post or ex ante measures of user costs to calculate the contribution of capital? The answer, based on a simple model of temporary equilibrium, is that ex post is better in theory. In practice researchers usually calculate ex post user costs by assuming that the rate of return is equalised across assets. But this is only true if expectations are correct. A numerical example shows that either ex ante or ex post can be closer to the true measure, depending on the parameters. I propose a hybrid method that makes use of elements of both approaches. I test this and the other methods using data for 31 UK industries"--London School of Economics web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 7/25/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.