School of Economics and Finance

No. 434: A Benchmark Estimate for the Capital Stock. An Optimal Consistency Method

Jose Miguel Albala-Bertrand , Queen Mary, University of London

February 1, 2001

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There are alternative methods to estimate a capital stock for a benchmark year. These methods, however, do not allow for an independent check, which could establish whether the estimated benchmark level is too high or too low. I propose here an optimal consistency method (OCM), which may allow estimating a capital stock level for a benchmark year and/or checking the consistency of alternative estimates of a benchmark capital stock.

J.E.L classification codes: O4, B4

Keywords:Benchmark capital, Perpetual inventory method (PIM), Optimal consistency method (OCM)