capital deepening

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capital deepening

an increase in the CAPITAL input in the economy (see ECONOMIC GROWTH) at a faster rate than the increase in the LABOUR input so that proportionally more capital to labour is used to produce national output. See CAPITAL WIDENING, CAPITAL-LABOUR RATIO, PRODUCTIVITY.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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Growth depends upon physical capital accumulation (that is investment), growth in GDP and labour productivity that includes human capital deepening, physical capital deepening, and technological gains, in a market-oriented economy with supportive government policies.

When policies are at odds with reality

Those three components are: capital deepening effect, skills upgrading and MFP growth.

Productivity Growth in Canada and the United States: Recent Industry Trends and Potential Explanations

The low level of business investment also helps us understand the limited extent of capital deepening (the intensity of capital use per employee), despite large falls in the costs of capital and a lower rate of typical stock depreciation, and this reduction in capital employed contributes directly to lower levels of labour productivity.

The financial foundations of the productivity puzzle

That framework has two basic elements: (1) a decomposition of labor productivity growth into contributions from capital deepening, labor quality, and MFP; and (2) a decomposition of MFP growth into contributions from different sectors.

Prices of high-tech products, mismeasurement, and the pace of innovation

He agreed that capital spending is endogenous, but noted that the recent recovery has been the slowest recovery in capital deepening since 1948, or at least as long as capital deepening has specifically been measured.

General discussion

First, there is the hypothesis of capital deepening: technological innovations of various kinds produce better and cheaper equipment--robots, ATM machines, powerful software--that replaces workers and redistributes income from labor to capital.

The laboring labor share of income: the "miracle" ends

First, it can accelerate the capital deepening process in the ICT user industries if it decreases the investment to output relative price.

Which role for ICTs as a productivity driver over the last years and the next future?

higher growth rates following a boost in capital deepening, could

MOODY'S: MONTENEGRO'S DETERIORATING DEBT METRICS ARE MITIGATED BY HIGH DEBT AFFORDABILITY

The basic measure of the pace of innovation in an economy is the growth rate of total factor productivity (TFP), which is calculated by subtracting from labor productivity growth both the contribution of growth in the capital-labor ratio (capital deepening) and the effect of higher educational attainment.

Slower U.S. Growth in the Long- and Medium-Run

Building on Malmquist (1953), Kumar and Russell (2002) show that labor productivity growth depends on capital deepening, efficiency change, and technical change (5).

FDI spillovers, efficiency change and host country labor productivity: evidence from GCC countries