Double-Counting of Investment
Bibliographic Data
| ID | 9718455 |
|---|---|
| Authors | Robert J Barros (0000-0003-3761-827X, Harvard University Press, corresponding author), Robert J Barro |
| Year | 2021 |
| Publication date | 2021-01-20 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (PUBLISHER • GB) |
| DOI | 10.1093/ej/uea1b005 |
| OpenAlex | W4210655744 |
| Language | EN |
| References cited | 5 |
The national-income accounts double-count investment, which enters once when it occurs and again in present value as rental income on added capital. The double-counting implies that GDP and national income overstate sustainable consumption. An alternative measure, ‘permanent income,’ equals consumption in the steady state but deviates from consumption outside of the steady state because expensing of gross investment applies to the long-run flow, not the current value. The permanent-income perspective substantially affects measured factor-income shares. When computed in relation to permanent income, the U.S. labor-income share has been reasonably stable, in contrast to the declining share based on GDP
Adjusted gross income · Comprehensive income · Consumption (sociology · Econometrics · Economics · Gross income · Income distribution · Inequality · Investment (military · Labour economics · Macroeconomics · Measures of national income and output · Monetary economics · Net national income · Permanent income hypothesis · Public economics · Renting · Economic theories and models · Economic Theory and Policy · Fiscal Policy and Economic Growth · Mathematics
| Citation velocity | historical |
|---|---|
| Highly cited | No |