Appended Note 2-5 Estimation Method for Capital Cost

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Besides, the following presumption is needed for the estimate equation for the above capital cost.

  • Firms take actions for profit-maximizing and the capital investment for firms is performed in order to adjust a deviation of optimal capital stock and real capital stock.
  • The stockholder (investor) faces a tax system similar to the firms. Firms also take action for profit-maximizing, while in particular paying strong attention to the institutional investors (stockholders).
  • Capital gains by the capital good' s price change is not considered for firms.

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