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.
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domestic capital formation, thereby restraining capital deepening, productivity growth, and, ultimately, output and real wage growth, with the economic costs of corporate taxation thereby increasingly and disproportionately borne by the less mobile factor of productionnamely, labor.
If the Philippines is to maintain rapid growth, it requires more capital deepening.
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.
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.
And the contribution of hourly labour productivity growth is itself also decomposed into two sub-components: total factor productivity (TFP) and capital deepening.
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.
First, it can accelerate the capital deepening process in the ICT user industries if it decreases the investment to output relative price.
higher growth rates following a boost in capital deepening, could
Gross fixed assets per worker could be used to capture the capital deepening (intensity) (Berlemann and Jan-Erik Wesselhoft 2012).
ICT investment contributes to capital deepening in all industrial and commercial sectors, thereby assisting in generating economic growth that is more sustainable in the long term," he noted.
Capital Deepening Ratio- Capital deepening ratio or capital intensity represents the relationship between capital and labour in a particular factor mix.
Another approach to forecasting future productivity growth consists of forecasting separately each of the factors that determine labor productivity in the long run: capital deepening, labor quality, and total factor productivity.

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