Estimates of gross capital stocks are essential for estimating production technologies, investment demand functions and other econometric models. In this paper we discuss measurement concepts of capital and alternative empirical methods to derive estimates of capital stocks from data on output and gross investment. A method of simultaneous estimation of production functions and capital stocks developed by Dadkhah and Zahedi (1986) is applied in the computation of a surrogate variable for aggregate gross fixed capital stock for Egypt utilizing national accounts data for the period 1960-1980. The estimation technique utilizes perpetual inventory with capital efficiency declines geometrically. Empirical findings are presented and discussed.