Japan ’ s Intangible Capital and Valuation of Corporations in a Neoclassical Framework ∗

Employing a new accounting data set, this paper estimates the value of productive capital stocks in Japan using the neoclassical model of McGrattan and Prescott (2005). We compare those estimates to actual corporate valuations, and show that the actual value of equity plus net debt falls within a reasonable range of the theory’s prediction for the value of… CONTINUE READING