In recent years, US investment has been lackluster, despite rising valuations. Key explanations include growing rents … and growing intangibles. We propose and estimate a framework to quantify their roles. The gap between valuations … -- reflected in average Q -- and investment -- reflected in marginal q -- can be decomposed into three terms: the value of …

, collectively known as "intangible capital" can explain much of the weakness in physical capital investment since 2000. Moreover …, intangibles have distinct economic features compared to physical capital. For example, they are scalable (e.g., software) though … concentration over the last two decades. Indeed, we show that the rise in intangibles is driven by industry leaders and coincides …

fully appropriate the returns generated by intangibles. We explore the implications of these two mechanisms for firm scale …, scope, and investment decisions, and we outline their connection to recent macroeconomic and financial trends in the US …

Published macroeconomic data traditionally exclude most intangible investment from measured GDP. This situation is … rate of change of output per worker increases more rapidly when intangibles are counted as capital, and capital deepening …

tax revenue. Since the investment tax credit was available only for equipment, its repeal raises the effective rate of … per year. Repeal of the investment credit taxes equipment more like other tangible assets but less like intangible assets … 1986 not only repeals the investment tax credit but reduces rates as well. Efficiency always increases in this model …

We present several empirical facts about trends in marketing investment in the US. We also present estimates of the …

by introducing intangible investment and non-neutral technology change with respect to producing intangible investment …. We use the theory to compare current accounting measures for labor productivity and investment with the corresponding … measures for the model economy with intangible investment. Our findings show that standard accounting measures greatly …