The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd


  • Gautam Mathur
Reference work entry


Depreciation estimates the decline in the value of capital over time. It is highly important to capital accounting, since the rate of dividend is calculated as the ratio of the surplus to the current value of assets. The causes of the depreciation of equipment are twofold: its productivity may fall with age, and over time its expected remaining earning life is shorter. Depreciation is taken to be the difference between gross and net investment but total new employment is given by gross investment: the physical counterpart of replacement (of equipment or manpower) is needed give the full picture.


Champernowne, D. G. Depreciation Kahn, R. F. National income statistics One-hoss shay Robinson, J. V. Sraffa, P. Torrens, R. Von Neumann, J. 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Gautam Mathur
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