Rents and Intangible Capital: A Q+ Framework

In recent years, US investment has been lackluster, despite rising valuations. Key explanations include growing rents and intangibles. We propose estimate a framework to quantify their roles. The gap between valuations — reflected in average Q marginal q can be decomposed into three terms: the value of installed intangibles; generated by physical capital; an interaction term, measuring intangible-related terms contribute significantly gap, particularly fast-growing sectors. Our findings suggest care pure-rents interpretation, given role