Perpetual Inventory Method (PIM)


The perpetual inventory method (PIM) is used to generate measures of the nation's capital stock. The capital stock series are for fixed assets only, covering buildings, infrastructure, transport equipment, machinery and other equipment and intangible assets owned by producers. The PIM generates an estimate of the capital stock by accumulating past purchases of assets over their estimated service lives.

Using gross fixed capital formation (by industry and asset type) as the key input series, the PIM operates by

  • calculating age-efficiency functions for each type of asset (used to calculate chain-volume measures of productive capital stock), and then
  • using the age-efficiency functions to determine age-price functions which are used to calculate net capital stock and consumption of fixed capital (both valued in current prices).

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