The Economics of Intangible Capital: Measurement and Evidence

Abstract:

This project is to study, quantitatively, two key economic properties of intangible capital: economy of scale and limits to excludability. We will develop new measures of a firm’s investment in intangible capital and the market value of intangible capital. We will study how much intangible capital can contribute to understanding recent macroeconomic and financial trends: the decline in measured aggregate productivity; the rise in the labor income share; the growing divergence between Tobin’s Q and investment; and the rise in rents. Along the way, we will study the q theory of investment in intangible and physical capital, and the incentive/contracting issues that arise when intangible capital is key to production.

Skills and experience required for the project:

Be proficient in coding in Python; Ideally also have some knowledge in Stata.