Standardised capital stock estimates in Latin America: a 1950-94 update

Capital stock estimates are used extensively in many areas of economic research, in spite of both theoretical and practical difficulties with respect to their use, estimation and meaning. The lack of comparable capital stock estimates in Latin America has hindered analysis of economic development in the region and comparisons with other developed and developing countries. Standardised gross and net fixed capital stock estimates for the 1950-94 period are presented for seven Latin American countries: Argentina, Brazil, Chile, Colombia, Ecuador, Mexico and Venezuela. The methodology employed is the 'perpetual inventory method' which estimates capital stocks as a weighted sum of past investment flows. Several methodological issues are discussed, especially depreciation and service life estimation. Capital stocks have been disaggregated in machinery and equipment, non-residential and residential structures with services lives of 15, 40 and 50 years respectively.