23.Netcapitalstock.PDF

CAPITAL 23. Net capital stock Net capital stock reflects the market value of the stock of use the PIM model, the length of time series available for fixed assets in the economy and as such provides an impor- GFCF by product. tant indication of overall wealth. It also forms an important OECD countries use various types of retirement and depre- input into the derivation of other statistical indicators, ciation functions that may differ in shape and in regard to such as depreciation and, in some cases, capital services. the average and maximum service lives for different types of assets. For example, some countries use linear deprecia- tion profiles (corresponding to a constant amount of depre- Definition ciation every period) and others use geometric profiles (corresponding to a constant rate of depreciation every The stock of assets surviving from past periods, and period). However, the use of different parameters and corrected for depreciation is the net (or wealth) capi- profiles for depreciation does not in itself imply a lack of tal stock. The net stock is valued as if the capital good comparability. There may be very good reasons for these (used or new) were acquired on the date to which a differences. For example, even if one could assume that the balance sheet relates. The net stock is designed to buildings in one country were exactly the same as another, reflect the wealth of the owner of the asset at a partic- one might expect a higher rate of depreci