NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Measuring Depreciation For Japan: Rejoinder to Dekle and Summers

Fumio Hayashi

NBER Working Paper No. 3836
Issued in September 1991
NBER Program(s):   PR

Recently, my claim that depreciation reported in the Japanese national accounts is underestimated by a substantial margin has been challenged by Dekle and Summers (NBER Working Paper No. 3690), on the ground that the implied depreciation rate (ratio of depreciation to the capital stock) is implausibly high. I argue in this rejoinder that Japan's high depreciation rate can be attributable to two factors. First, the depreciation rate for owner-occupied housing is much higher in Japan. Second, equipment capital (a component of the denominator in the depreciation rate) in the Japanese national accounts seems underestimated. Therefore, my estimate of the level of depreciation for Japan does not seem exaggerated.

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Document Object Identifier (DOI): 10.3386/w3836

Published: "Rejoinder to Dekle and Summers." Bank of Japan Monetary and Economic Studies, 9(2): 79-89, September 1991.

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