Perpetual Inventory Method

http://faculty.apec.umn.edu/rsmith/documents/CreateCapitalStock.pdf

http://www.econ.umn.edu/~selis004/su11_3102/GrowthAccountingNotes.pdf

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When calculating real investment, it is best to collect data on nominal investment and then deflate the series by a GDP deflator. This procedure ensures the real investment series, and, thus, the capital stock series, and the real GDP series are deflatedby the same price index.
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http://acta.mendelu.cz/pdf/actaun201361072367.pdf

http://www.econstor.eu/bitstream/10419/71091/1/73983858X.pdf

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Aware of this problem, HARBERGER (1978) uses three-year averages instead of a single year to generate more stable and reliable capital stock estimates. In a later application of the Steady State Approach, NEHRU and DHARESHWAR (1993) proposed an alternative procedure. In order to generate a reliable initial value of the investment time series they regress the time series of log investments on time and then use the fitted value for the first period to calculate the initial capital stock.
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