[OPE] A musing about the rhythm of capital accumulation in the US 1980-2009

If I add up the annual totals for net US domestic investments (i.e. after
deduction for depreciation) for 1980 to 2009 provided in NIPA table 5.2.6
(line 3), expressed in chained 2005 dollars, I obtain a total of $19,090.8
billion. This is like the net fixed capital formation across those years
1980-2009.

By comparing nominal with constant dollar annual values, I can reflate the
2005 total to 2009 dollars, the difference being 0.351 or 3.51% which works
out to $25.8 trillion in rounded figures. This last mentioned value
represents the total net additions to fixed assets in the US during the
interval 1980-2009. This would suggest, that due to net positive fixed
investments, the US physical capital stock excluding durables and land
increased in value by about $25.8 trillion during 1980-2009, in real terms,
expressed in 2009 dollars.

>From an annex of the US Budget for fiscal 2009, I can get physical capital
stock estimates for 1980 and 2008 using table 13.5 ("National Wealth") in
the Analytical Perspectives 2009 annex (p. 200), expressed in 2007 dollars.
The series has be discontinued by the Obama administration, so no more
recent data is available.

In 1980, US publicly owned physical assets were worth $5.2 trillion and US
privately owned physical assets were worth $16.6 trillion, excluding private
land and consumer durables (the private land was worth $6.4 trillion and
consumer durables $2 trillion). In 2007, US publicly owned assets were
worth 9.7 trillion and US privately owned assets were worth $35.2 trillion,
excluding private land (16.9 trillion) and consumer durables ($4 trillion).

I can then calculate that the total US physical capital stock in 1980 was
$21.8 trillion excluding private land and consumer durables, or $30.2
trillion including land and durables. In 2007, the corresponding figures are
$44.9 trillion and $65.8 trillion.

The conclusion is that the US budgetary data show that, in 2007 dollars, the
US physical capital stock must have increased by +$23.1 trillion in
1980-2007 excluding private land and consumer durables, or by +$35.6
trillion if we include private land and consumer durables. The increase in
the value of land 1980-2007 is +10.5 trillion and the increase in consumer
durables is +$2 trillion, together +$12.5 trillion.

To obtain 2009 values, I extrapolate first in 2007 dollars with simple
(crude guesstimate) interpolation. Thus, for 2009 I assume publicly owned
physical assets were worth $9.9 trillion and privately owned physical assets
were worth $38.4 trillion, excluding private land (say, $19 trillion) and
consumer durables ($4.2 trillion). Together land and consumer durables equal
$23.2 trilion. I then estimate the 2009 total physical capital stock as
$48.3 trillion (excluding land private land and consumer durables) and
$61.6 (including land and durables) in 2007 dollars.

This would mean that in 2007 dollars, the US physical capital stock must
have increased by +$26.5 trillion in 1980-2009 excluding private land and
consumer durables, or by +$31.4 trillion if we include private land and
consumer durables. The increase in the value of land (+$12.6 trillion) and
durables (+$2.2 trillion)1980-2007 is +$14.8 trillion.

Reflating this result to 2009 dollars using a conversion factor of 2.5437%,
based on the annual inflation rates implied by the difference between annual
constant and current dollars values for net fixed investment 2007-2009, I
obtain the following: in 2009 dollars, the US physical capital stock must
have increased by +$27.2 trillion in 1980-2009 excluding private land and
consumer durables, or by +$32.2 trillion if we include private land and
consumer durables. The increase in the value of land (+$12.9 trillion) and
durables (+$2.3 trillion)1980-2007 is +$15.2 trillion.

We can now compare the NIPA data and the budget data.

*The NIPA result was that the US physical capital stock excluding durables
and land increased in value by about +$25.8 trillion during 1980-2009, in
real terms, expressed in 2009 dollars (about +$890 billion per year on
average)

*The Budget result is that the US physical capital stock must have increased
by +$27.2 trillion in 1980-2009 excluding private land and consumer durables
(about +$938 billion per year on average)

The difference is +$1.4 trillion. What can we attribute this difference to?
Either the difference is attributable to measurement error, or to the fact
that the public asset figures include the value of government land which
cannot be separated out, or to the addition of imported goods to the total
stock.

If we include the change in land values and the change in the stock of
durables, the difference for 1980-2009 is between a figure of +$25.8
trillion and a figure of +$32.2 trillion, which amounts to +$6.4 trillion.
However that comparison is not really valid, since the NIPA figure excludes
consumer durables and land values except land improvements.

What about the value of net imports of goods (imports less exports of goods)
for 1980-2009, valued in 2009 dollars? We could be lazy academics, but let's
calculate it anyway on a BOP basis using the Census data. By my reckoning,
the result is a net gain of goods to the US worth $10.99 trillion in 2009
dollars, equal to about 78% of what US workers produce in a year nowadays,
or an average of $380 billion a year or so in 2009 dollars. A lot of that is
petroleum products, other industrial supplies, cars, and computing
equipment. Where did that $10.99 trillion go? A lot of it was burnt up
(gas), used in the manufacture of products (raw materials), or ended up in
rubbish tips (dumped cars, household equipment etc.). Ecologists may ponder
the rest of the story.

Jurriaan

_______________________________________________
ope mailing list
ope@lists.csuchico.edu
https://lists.csuchico.edu/mailman/listinfo/ope
Received on Thu Sep 23 12:49:55 2010