The Marginal Products of Residential and Non-Residential Capital Through 2009

Casey B. Mulligan, Luke Threinen

NBER Working Paper No. 15897
Issued in April 2010
NBER Program(s):   EFG   PE   PR

Estimates of the marginal product of capital can help forecast economic growth, test competing business cycle theories, and perform cost-benefit analysis. This paper presents annual and quarterly estimates of the marginal product of capital in the U.S. separately for the residential and non-residential sectors. The two sectors had positively correlated marginal products until the 2000s, when the residential marginal product fell during the housing boom, and rose during the housing bust. By the end of 2009, the residential MPK was back to the level of the 1990s. Although off its lows, the non-residential MPK is still below its historical average.

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An online appendix is available for this publication.

This paper was revised on December 5, 2011

Acknowledgments

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