Mathematical Approach to Estimate Capital Stock

Khalid H. Awni

Abstract


Capital Stock (CS) is considered one of the most important variables used in many economic and social studies, particularly those applying the quantitative approach in their analysis as the case with production functions and other various econometric models’ applications. In practice, the data about CS are almost not available; whereas the data about Gross Fixed Capital Formation (GFCF) are usually available.

The availability of accurate data about CS needs comprehensive periodical surveys which need lots of human efforts and are costy too. Therefore, many researchers face problems of data unavailability about CS in the statistical bulletins, and such shortage in the data creates serious difficulties in their analytical research works.

Because of the importance of CS in the analysis and the unavailability of such data, our study is an attempt to find a suitable mathematical formula reliable for CS estimations by using (GFCF) data. So, the aim of the study is to find out a relevant formula which can be used to generate time series estimations for CS whether at national level or sector level.

The above mentioned mathematical formula is applied on Jordan's economy (at the national level) as well as on some Arab countries. The application results are given in the end of the study.


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