ESTIMATION OF THE DEPRECIATION RATE OF PHYSICAL AND R-AND-D CAPITAL IN THE US TOTAL MANUFACTURING SECTOR

Numerous studies on production and cost, the sources of productivity, and endogenous growth have recognized the pivotal role played by physi cal and R&D capital stocks. Analysis of the contributions of these cap itals often requires measures of the stocks of physical and R&D capita l, which in turn requires measuring their depreciation rates. In this paper we specify a model of factor demand that allows us to estimate t he depreciation rates of both physical and RED capital jointly with ot her model parameters. The model is estimated for the U.S. total manufa cturing sector.