812 Bulletin
Before proceeding to the data, some further theory remarks on the measurement of capital. As pointed out by e.g. Jorgenson and Griliches (1967), the conceptually correct measure of capital in this productivity context is the flow of capital services. This raises a number of measurement problems set out, for example, in the OECD productivity manual (OECD, 2001). We estimate the now standard measure as follows. First, we build a real capital stock via the perpetual inventory method whereby for any capital asset k, the stock of that assets evolves according to
Kk,t =Ik,t +(1−