I construct measures of technology capital and country openness for the US economy and the rest of the world for 1982-2007. The key identifying assumption is that firms equalize returns on tangible and technology capital. For the US economy, technology capital is about one-third of tangible capital, and the degree of openness is
between 0.61 and 0.70. I provide both a two-country estimation and a multicountry estimation, and find that the US estimates are almost identical in both cases. The welfare loss from totally closing the US economy is small, but the welfare gain from totally opening the US economy is large. (JEL E22, F41, O30)
"How Important Is Technology Capital for the United States?"
American Economic Journal: Macroeconomics,
Capital; Investment; Capacity
Open Economy Macroeconomics
Technological Change; Research and Development; Intellectual Property Rights: General