Aggregation Across Assets and Industries

         To this point, most of the discussion has been conducted with reference to a single (type of) asset. Many concepts are indeed best conveyed in this manner but aggregation plays an important role in how the concepts of productive stock, capital services, net stock and capital composition translate into measurement.          The single most important point in this context is that it is the process of aggregation that essentially shapes the difference between capital services and the net or wealth capital stock. At the level of individual assets, the productive stock may differ from the net capital stock but not necessarily so. The most important case where the two measures coincide is in the presence of constant, geometric rates of depreciation which imply the same rates of efficiency decline and hence identity between productive and net stock at the asset level. However, for all types of age-efficiency and age-price profiles, when the productive stock is multiplied through by an expression for unit user costs, a difference arises between the value of the net stock and the value of capital services. This difference carries through in the aggregation across types of assets, because aggregation weights differ in the two cases.      