Fixed capital stock estimation: an empirical exercise using Irish data

Abstract

The present paper arose from the need to obtain estimates of the stock of fixed capital (excluding dwellings and roads) in the Irish economy during the period 1953 to 1972. The two existing estimates (based on capital census estimates) are restricted for the most part to the manufacturing sector, exhibit a wide margin of divergence and are open to doubt on a number of issues. It was decided therefore to start afresh. So far as the author could ascertain there is no capital census information for the nonmanufacturing sectors and for reasons to be discussed below, the information that is available for the manufacturing sector is of doubtful merit. In addition appropriate capital expenditure data are not available earlier than 1953 - though there are some fragments of information relating to pre-1953 which as will be seen, prove useful. The method of estimation proposed - a derivation of perpetual inventory - is in the circumstances an approximate one and is reported in the hope that it may stimulate further interest in the problem of capital stock estimation particularly at the level of national accounting. It is possible however that the results might serve as a temporary makeshift pending the accumulation of further information which would facilitate the development of more reliable capital stock estimates.