Abstract
Until the seminal work of Dale Jorgenson, microeconomic analysis of production was handicapped by the lack of a well-defined and the oretically solid paradigm to compute price of capital measures. Ideally, if capital owners and capital users were separate groups, the market rental value of the services rendered by the various types and vintages of capital would be determined by observing and recording the transaction prices concluded between the capital owner and using groups. However, since the bulk of capital assets are owned and used by the same entity, this creates the problem in empirical work of developing a suitable behavioral model for imputing the value of the services supplied by owned-and-used capital stocks.
The author acknowledges helpful comments and encouragement received from Irwin Bernhardt, Ishaq Nadiri, and anonymous referees. Also acknowledged is the invaluable editing and typing assistance received from Ruda Smith. The views expressed here do not necessarily represent those of the U.S. Department of Commerce
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Mohr, M.F. (1986). The Theory and Measurement of the Rental Price of Capital in Industry-Specific Productivity Analysis: A Vintage Rental Price of Capital Model . In: Dogramaci, A. (eds) Measurement Issues and Behavior of Productivity Variables. Studies in Productivity Analysis, vol 8. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-6867-8_3
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