Estimation Research Of China’s Urban Public Capital Stock(1995-2012)

The capital stock is the research element that cannot be avoided in the research of the production function, economic growth, investment efficiency, TFP growth and other macro-economic problems. Based on the research of other scholars’estimations of the capital stock, this paper learns from the classic and popular ways in the research of capital stock. By refining of capital stock, this paper estimates China’s capital stock, and makes much analysis.The article contains:Firstly, discuss the research background and significance. China’s public investment and capital stock scale is in line with China’s economic system development. At first, in the planned economic system, public investment occupy most part of whole investment since1949, the public capital stock also become the major part of the country’s whole capital. After the reform of the economic system in1978, market economic system began to play a role in economic growth. The proportion of public capital investment began to decline, mainly because private investment began to expand, private investment began to flourish. Therefore, the public investment and accumulation of capital demands quality more, pay much attention to the efficiency of public investment, and the output efficiency, etc. As early as in the "Eleven Five Year Plan", it made clear that city group is the main form of urbanization promotion.In June,2013, a new round of urbanization is in planning, and the city group is the main form of future urbanization, it is now being given more attention. Nowadays and a longer period, the rapid promotion of urbanization is the main policy direction.In this process, there must be a large number of capital investment and accumulation. The scale of public investment and the concept has also been extended. Focus on public investment and capital efficiency is necessary.After discussing the research background and the significance, we briefly summarized the research method and the structure of the paper. The method is perpetual inventory method, the basic idea is:the next period’s net capital stock can be seen as the function among the current period’s capital stock, investment and depreciation. Assuming that the capital efficiency declines in a geometric way, we come out a formula.Kt41=kt(1-δ)-It/P. Therefore, in the PIM method, we need to handle with these factors:the base year capital stock, depreciation rate, investment series data and investment price index. The estimation behind is based on the processing method of four factors above, and it is the key to the success of the PIM method.The second part of this paper is the literature review. We first review the study on the capital stock, mainly to discuss the different processing methods of the key elements. Then we review research on public capital stock, mainly the reasons why it choose a specific method when deal with the four key factors. The third part is to define the theme--urban public capital. The public capital stock is the public investment in public infrastructure which made by government. According to Marx’s political economics, capital is the value of bringing surplus value. To define the public capital is the first and key step to the study of public capital stock. Because public capital accumulation is due to public investment, so we must define the public investment. Public investment include two categories:one is the investment in social public welfare project, the other is the investment in economic foundation project.The fourth part is the main part. it is to estimate China’s urban public capital stock. My study begins from year1995, first make analysis of perpetual inventory method. The following is the specific treatment on the four factors of the perpetual inventory method. The investment series data comes from urban fixed asset investment data in the budget funds in Statistical yearbook, the depreciation rate is9.5%, the investment price index of year1995-2012can be found in Statistical yearbook, the base year capital stock comes from the method by Wu (2007). At last, we estimate urban public capital stock data from1995-2012, which is an unchanged price data, the standard year is1995. Based on the result, we make simple trend analysis and capital-output analysis, in this same way, we estimate the whole country’s public capital stock, thus we come out the public capital ratio. And then to estimate the social fixed capital stock, so that we know the public capital ratio and its change trend. Finally we calculate private capital stock, so as to analyze the development and reasons for the changes of urban public capital and private capital stock.By the calculation and analysis, the conclusions are made:1, our public investment and public capital accumulation is now developing rapidly, public investment grows smoothly, urban public capital is accumulating rapidly. It is of significance to the development of the national economy.2, the urban public capital output ratio has experienced a rise and fall and then a slight rise stage, which shows the efficiency of urban public capital has experienced a fall and then rise and decline slightly stage. The reason may be the fluctuation of the public investment scale.3, the urban public capital stock occupy the vast majority of the public capital stock, in the background of urbanization, we know that future urban public capital stock has space to rise.4, China’s urban public capital stock proportion is stable, this indicates the steady development of the urban public capital stock in China and the internal structure of China’s capital stock is relatively stable.5, for the majority of rural areas, public investment and public capital accumulation rate are far behind the average city levels. This reflect a serious shortage of rural public investment and rural public capital accumulation, this is the main reason for poverty and backwardness there. Therefore, we should increase public investment in rural areas in the process of urbanization in the future. Promoting the accumulation of public capital in rural areas is also good to the implementation of policies.