capital-labour ratio

capital-labour ratio

the proportion of CAPITAL to LABOUR inputs in an economy If capital inputs in the economy increase over time at the same rate as the labour input, then the capital-labour ratio remains unchanged (see CAPITAL WIDENING). If capital inputs increase at a faster rate than the labour input, then CAPITAL DEEPENING takes place. The capital-labour ratio is one element in the process of ECONOMIC GROWTH. See CAPITAL-INTENSIVE FIRM/INDUSTRY, LABOUR-INTENSIVE FIRM/INDUSTRY, AUTOMATION.
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These variables include the stock of research and development (R&D) knowledge, the capital-labour ratio, rural infrastructure levels, the urbanisation rate, temperature, and rainfall.
Usually some other variables like human capital, innovation, trade openness, research and development are included in the model along with capital-labour ratio to analyse determinants of labour productivity [see for example, Velucchi and Viviani (2011); Han, Kauffman, and Nault (2011); Hussain (2009); Apergis, et al.
Intuitively, this assumption might seem important as it influences the equilibrium capital-labour ratio.
4%, TFP rose by 3% and the capital-labour ratio increased by 2.
In the present study, capital-labour ratio was taken as a measure of capital intensity.
To capture this comparative-advantage determinant, we use capital-labour ratio measured as the ratio of fixed assets to the labour force of the firm.
Because sales growth is a reflection of shortterm firm growth, and asset growth is a reflection of long-term firm growth, productivity and capacity utilization are, to a large extent, influenced by investments that increase growth and by the capital-labour ratio, which indicates that technology tends to be employed in fast-growing firms.
The nature of input technical bias can be assessed comparing the value of IBTCi,t+1 to the evolution of the capital-labour ratio (FARE et al.
A projected rebound in labour productivity in the business sector, as high rates of business investment lift the capital-labour ratio, would underpin such a slowing of inflation.
Within a growth accounting framework, labour productivity growth can be decomposed into multifactor productivity growth and growth in the capital-labour ratio.
Cekota (1988) estimates that the capital-labour ratio increases by more than 70 percent as a result of technological change which implies a significant degree of substitution of capital for labour.