Capital stocks of firms — Calculation on a microeconomic basis

Abstract

One characteristic of capital theory is that there is number of controversies about the term "capital", its calculation and its relation to other important economic dimensions such as interest rate and private and social return on investment 1. Particularly the term "capital stock" is frequently used (in the sense of total assets), but there is no clear concept of how to measure it empirically and (especially on the microeconomic level) hardly any empirical investigations. Before presenting our proposal for the calculation of capital stock, i. e. the determination of total assets of firms, we want to discuss the characteristics of "capital" and some concepts for its calculation, and we shall demonstrate how an alteration of premises and methods affects the results of economic studies. The term "capital" is to somehow comprise the productive property, i. e. the produced industrial equipment. So in our analysis we define capital as the possession or stock of machines, plant and equipment 2. In other words, capital is a multi-dimensional term be-