Marginal efficiency of capital

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Marginal efficiency of capital

The percentage yield earned on an additional unit of capital.

Marginal Efficiency of Capital

The extra yield that an investor earns for each additional dollar of capital invested in the venture or security. The marginal efficiency of capital helps measure how much investment capital is worth the risk at a given return. It is also called marginal productivity of capital.
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These results essentially describe how the growth effects of public good provision may be mediated by the changes it induces in marginal productivity of capital and its magnitude in relation to the elasticity of capital.
Depending on the situation, it may be higher or lower than the marginal productivity of capital (especially since this quantity is not always precisely measurable)' (212).
These plausible assumptions mean that in a growing economy, eventually the capital stock is just too large for the marginal productivity of capital to replace and increase the stock of capital.
The coefficients in Equation 8 must be carefully interpreted, a is the marginal productivity of capital in the domestic-funded sector, a is the proportionality factor linking the marginal productivity of labor in the domestic-funded sector to the average labor output.
A higher price of bequests directly reduces returns to capital through [xi] and additionally decreases (increases) the marginal productivity of capital (land) by drawing workers into the agricultural sector.
These enterprises recorded marginal productivity of capital of 2.1862 units.
Positive output elasticity with respect to capital for textile and organized manufacturing sector (during pre-reform period) implies marginal productivity of capital is positive for this industry.
Indeed, according to Lange, capital accumulation would come to a halt only when the marginal productivity of capital would equal the time preference of the individuals.
Therefore, marginal productivity of capital is higher.
To that end it propounds that: 1) marginal productivity of labour corresponds to the ratio of output to labour input quantity; 2) marginal productivity of capital corresponds to the ratio of output to capital input quantity; whereas, extension of this principle for 3-factor production function puts forward that--3) marginal productivity of energy corresponds to the ratio of output to energy input quantity.
The diminishing marginal utility of scientific investment due to risk aversion plays a role analogous to the diminishing marginal productivity of capital in traditional optimal growth theory beginning with Ramsey.
In the first case (case I), we have the Ramsey model because the marginal productivity of capital is decreasing for all amount of k.

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