Productive Stock and Capital Services

Abstract

The stock of a particular type of assets surviving from past periods, and corrected for its loss in productive efficiency is the productive capital stock1. Thus, productive stocks are directly related to the quantity and production aspect of capital. Productive stocks constitute an intermediate step towards the measurement of capital services. The assumption is made that the flow of capital services – the actual capital input into production – is proportional to the productive stock of an asset class. If the factor of proportionality is constant, the rate of change of capital services will equal the rate of change of the productive stock2. The same rate of change constitutes the volume component when it comes to splitting the change in the total value of capital services at current prices into a price and a volume component. A different way of seeing the productive stock of a particular type of asset is as the embodied volume of current and future capital services. The concept of a productive stock is only meaningful at the disaggregate level of a particular type of asset. Once each asset’s productive stock is combined with the corresponding capital service price (per unit of the productive stock), the resulting value represents the flow of capital services. This is the relevant variable for aggregation across different types of assets.