Capital stock estimation in Spain. New extensions. Matilde Mas Ezequiel Uriel Universitat de València e Ivie Vicent Cucarella Juan Fernández de Guevara Ivie
Research Objectives: Elaboration of Gross Fixed Capital Formation series in current and constant prices from 1954 (base year 1995) New ESA methodology Calculation of GFCF series by types of assets Special attention: GFCF in software, hardware and communication equipment Elaboration of Fixed Capital Stock series 1990, base year 1995 Gross stock Productive stock Net stock (wealth)
New concepts in the ESA-95 on Capital Gross Formation Included in INE s CNE-95 series - computer software and large databases, - mining explorations, - entertainment, literary or artistic originals, - purchase of military equipment as long as it is similar to those used by civilians, - valuing of production for final own use. Not included yet: - treatment of valuable objects in a specific GFCF heading
Classification of the gross fixed capital formation (GFCF) by types of assets Dwellings Other buildings/structures Transportation equipment Motor vehicles Other transportation materials Machinery and other products Agriculture, livestock and fishing products Metallic and machinery products Metallic products Machinery and mechanical equipment Office and computer equipment Other machinery and equipment Communications Other machinery and equipment not classified elsewhere. Other products Software Other products not classified elsewhere
TABLE 1. Statistical Sources for the linked GFCF series in current prices and its disaggregation by asset types Period Contabilidad Nacional de España. Base 1995 (INE) 1995-2000 Tabla Origen-Destino 1995,1996 (INE) Contabilidad Nacional de España trimestral. Base 1995 (INE) Contabilidad Nacional de España. Base 1986 (INE) Period Contabilidad Nacional de España. Base 1985 (INE) 1980-1995 Contabilidad Nacional de España. Base 1980 (INE) Contabilidad Nacional de España. Serie enlazada. Base 1986 (INE) Contabilidad Nacional de España. Serie enlazada. Base 1986 (FBBV-Ivie) Tablas Input-Output 1980, 1985-1994 (INE) Contabilidad Nacional de España. Serie enlazada. Base 1986 (INE) Contabilidad Nacional de España. Base 1970 (INE) Period Contabilidad Nacional de España. Serie enlazada. Base 1986 (FBBV-Ivie) 1964-1980 Tabla Input-Output 1975 (FIES) Tabla Input-Output 1970 (Ministerio de Planificación y Desarrollo) Tabla Input-Output 1966 (Organización Sindical Española) Contabilidad Nacional de España. Base 1958 (IEF) Period Contabilidad Nacional de España. Serie enlazada. Base 1986 (FBBV-Ivie) 1954-1964 Tabla Input-Output 1962 (Organización Sindical Española) Tabla Input-Output 1958 (Organización Sindical Española) Special cases Software and Communication Equipment
Graph I.1. GFCF Composition. Current prices. MAIN AGGREGATES 1954-1999 100% 80% Machinery and other products 60% Transport equipment 40% Others constructions 20% Dwellings 0% 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999(A) Dwellings Transport equipment Others constructions Machinery and other products
Graph I.2. GFCF Composition. Current prices. TRANSPORT EQUIPMENT 1954-1997 16% 14% 12% 10% 8% 6% 4% 2% 0% 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 Motor vehicles Other transport equipment
Graph I.3. GFCF Composition. Current prices. MACHINERY AND OTHER PRODUCTS 1954-1999 50% 40% 30% 20% 10% 0% 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999(A) Agriculture, livestock and fishi Machinery and metal products Other products
Graph I.4. GFCF Composition. Current prices. MACHINERY AND METAL PRODUCTS 1954-1997 35% 30% 25% 20% 15% Other machinery and equipment Office, computing and accounting 10% 5% Machinery and mechanical equipme Metal products 0% 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 Metal products Office, computing and accounting Machinery and mechanical equipme Other machinery and equipment
TABLE 2. Statistical Sources for the linked GFCF series in constant prices and its disaggregation by asset types Period 1995-2000 Contabilidad Nacional de España. Base 1995 (INE) Contabilidad Nacional de España trimestral. Base 1995 (INE) Contabilidad Nacional de España. Base 1986 (INE) Period Contabilidad Nacional de España. Base 1985 (INE) 1980-1995 Contabilidad Nacional de España. Base 1980 (INE) Contabilidad Nacional de España. Serie enlazada. Base 1986 (INE) Contabilidad Nacional de España. Serie enlazada. Base 1986 (FBBV-Ivie) Contabilidad Nacional de España. Serie enlazada. Base 1986 (INE) Period Contabilidad Nacional de España. Base 1970 (INE) 1964-1980 Contabilidad Nacional de España. Serie enlazada. Base 1986 (FBBV-Ivie) Period Contabilidad Nacional de España. Base 1958 (IEF) 1954-1964 Contabilidad Nacional de España. Serie enlazada. Base 1986 (FBBV-Ivie) Special cases Software, Hardware and Communication Equipment
2.000 Graph I.5. GFCF Evolution. Constant prices. MAIN AGGREGATES 1954-2000 1954 = 100 1.500 1.000 500 0 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999(A) GFCF Dwellings Others constructions Transport equipment Machinery and other products
2.500 Graph I.6. GFCF Evolution. Constant prices. TRANSPORT EQUIPMENT 1954-1996 1954 = 100 2.000 1.500 1.000 500 0 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999(A) GFCF Motor vehicles Other transport equipment
6.000 Graph I.7 GFCF Evolution. Constant prices. MACHINERY AND OTHER PRODUCTS 1954-1999 1954 = 100 5.000 4.000 3.000 2.000 1.000 0 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999(A) GFCF Agriculture, livestock and fishi Machinery and metal products Other products
10.000 Graph I.8. GFCF Evolution. Constant prices. MACHINERY AND METAL PRODUCTS 1959-2000 1959 = 100 8.000 6.000 4.000 2.000 0 1959 1964 1969 1974 1979 1984 1989 1994 1999(A) GFCF Office, computing and accounting Metal products Other machinery and equipment Machinery and mechanical equipme
Graph I.9. GFCF Evolution. Constant prices. Software and office, computing and accountig machinery. 1981-2000 1981 = 100 1.200 1.000 800 600 400 200 0 1981 1984 1987 1990 1993 1996 1999(A) GFCF Software Office, computing and accounting
Software (Concepts included in the GFCF of software are in cursive) Computer services Consulting Development and supply of complete packages Development and supply of customized software Installation and integration of systems Software maintenance Integrated customized projects Data processing. Data Center (Information Technology) Databases Outsourcing Hardware Maintenance Value Added Services Training Other computer services (part) Other computer activities Computer equipment manufacturing Computer equipment distribution Supply of auxiliary material Other computer activities not considered previously (part) 1 Other activities and services 1 The sections that correspond to computer programs are also included.
Price indexes for hardware and software. SOFTWARE 1995- Gross Domestic Product Implicit Price Index of Software Services 1959-1995 Alternatives: 1. P SW Spain = P GDP Spain P GDP USA P SW USA 2. P SW Spain = P GFCF Spain P GFCF USA P SW USA
Graph I.10. Price indexes for software (1995=100) 1959-2000 140 120 100 80 60 40 20 0 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 Based on US estimates and GFCF price index Software services US Price index price index (CNE) CFCF: Gross fixed capital formation
Hardware. Price indexes for hardware. 1995- Gross Domestic Product Implicit Price Index of Office machinery and computers 1975-1995 Alternatives: PGDP Spain P 1. HW Spain = PHW USA PGDP USA PGFCF Spain 2. PHW Spain = PHW USA PGFCF USA!3. Industrial Production Price Index (INE) 1959-1974 Alternatives: 1. 2. P P HW Spain = HW Spain = P GDP Spain P P GDP USA GFCF USA P GFCF Spain P HW USA P HW USA!3. Estimation based on the Industrial Production Price Index (INE) and the rate of growth of (1) or (2) above.
140 Graph I.11. Price indexes for hardware (1995=100) 1959-2000 120 100 80 60 40 20 0 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 Based on US estimates and GFCF price index Industrial price index* US price index Hardware (CNE) *1975-2000 Industrial price index 1959-1974 Own estimation based on Us data CFCF: Gross fixed capital formation
Software and hardware capital stock estimatimation in Spain. Step by step
TWO ASSETS: Software (Average services life: 3 years) Hardware (Average services life: 7 years)
STEP 1. GROSS CAPITAL STOCK OF ASSET i INit, Current Prices (Nominal) GFCF on asset i at time t P Price of asset i at time t (with reference to a base year, 1995) it, IR GFCF at constant prices of asset i at time t it, IR it, = IN P it, it, wit, Retirement (survival) function of asset i at time t
Function chosen: Winfrey S-3 (Truncated at 5 ) Maximum life: Software: 5 years Hardware: 11 years
KGit, Gross Capital Stock of asset i at time t, at constant prices (1995) KG c it, Gross Capital Stock of asset i at time t, at current prices T it, = it, j i, j j= 0 KG IR w T = Maximum services life c it, = it, it, KG KG P
STEP TWO: PRODUCTIVE CAPITAL STOCK f Age Efficiency function it, Hyperbolic function: fit, = ( T j)/( T β j) β Slope of the Age-Efficiency function For both Software and Hardware β has been fixed = 0.5
KPit, Productive Capital Stock of Asset i at time t at constant prices c it, KP Productive Capital Stock of Asset i at time t at current prices T it, = it, j i, j i, j j= 0 KP IR w f c it, = it, it, KP KP P
STEP 3. NET (WEALTH) CAPITAL V it, Age-Price Function of Asset i at time t V T i, j i, j= j+ 1 j= f 0 (1 + r) r has been fixed = 4%
vi, j Normalized Age-Price Function of Asset i v i, j = V V i, j i,0 KWit, Net (Wealth) Capital Stock of Asset i at time t at constant prices T it, = it, j i, j i, j j= 0 KW IR w v c it, KW Net (Wealth) Capital Stock of Asset i at time t at current prices c it, = it, it, KW KW P
Preliminary results for software and hardware
Graph II.1. Capital Stock at constant prices (base year 1995). SOFTWARE 1985-2000 Levels 2.500.000 2.000.000 1.500.000 1.000.000 500.000 0 1985 1990 1995 2000 Gross Capital Productive Capital Net (Wealth) Capital
20% Graph II.2. Capital Stock at constant prices. SOFTWARE Annual Rates of Growth. 1986-2000 15% 10% 5% 0% 1986 1988 1990 1992 1994 1996 1998 2000 Gross Capital Productive Capital Net (Wealth) Capital
Graph II.3. Capital Stock at constant prices (base year 1995). HARDWARE 1969-2000 Levels 6.000.000 5.000.000 4.000.000 3.000.000 2.000.000 1.000.000 0 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 Gross Capital Productive Capital Net (Wealth) Capital
30% Graph II.4. Capital Stock at constant prices. HARDWARE Annual Rates of Growth. 1970-2000 25% 20% 15% 10% 5% 0% -5% 1970 1975 1980 1985 1990 1995 2000 Gross Capital Productive Capital Net (Wealth) Capital
Graph II.5. Productive Capital Stock at constant prices (base year 1995) 1969-2000 Levels 6.000.000 5.000.000 4.000.000 3.000.000 2.000.000 1.000.000 0 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 Software Hardware
30% Graph II.6. Productive Capital Stock at constant prices. Annual Rates of Growth. 1970-2000 25% 20% 15% 10% 5% 0% 1970 1975 1980 1985 1990 1995 2000 Software Hardware
Graph II.7. Productive Capital Stock at constant prices (base year 1995) Index 1985 = 100 600 500 400 300 200 100 0 1985 1990 1995 2000 Software Hardware
Capital stock estimation in Spain. New extensions. Matilde Mas Ezequiel Uriel Universitat de València e Ivie Vicent Cucarella Juan Fernández de Guevara Ivie