Topic
Capital deepening
About: Capital deepening is a research topic. Over the lifetime, 5203 publications have been published within this topic receiving 230297 citations.
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TL;DR: The authors in this article argue that China's rapid growth over the last three decades has been driven by productivity growth rather than by capital investment, and they decompose the sources of growth into capital deepening, labor deepening, and productivity growth.
Abstract: The pace and scale of China's economic transformation have no historical precedent. In 1978, China was one of the poorest countries in the world. The real per capita GDP in China was only one-fortieth of the U.S. level and one-tenth the Brazilian level. Since then, China's real per capita GDP has grown at an average rate exceeding 8 percent per year. As a result, China's real per capita GDP is now almost one-fifth the U.S. level and at the same level as Brazil. This rapid and sustained improvement in average living standard has occurred in a country with more than 20 percent of the world’s population so that China is now the second-largest economy in the world. I will begin by discussing briefly China's historical growth performance from 1800 to 1950. I then present growth accounting results for the period from 1952 to 1978 and the period since 1978, decomposing the sources of growth into capital deepening, labor deepening, and productivity growth. But the main focus of this paper will be to examine the sources of growth since 1978, the year when China started economic reform. Perhaps surprisingly, given China's well-documented sky-high rates of saving and investment, I will argue that China’s rapid growth over the last three decades has been driven by productivity growth rather than by capital investment. I also examine the contributions of sector-level productivity growth, and of resource reallocation across sectors and across firms within a sector, to aggregate productivity growth. Overall, gradual and persistent institutional change and policy reforms that have reduced distortions and improved economic incentives are the main reasons for the productivity growth.
442 citations
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TL;DR: In this paper, the Austrian and more general models of reswitching can be found, and the well-behaved factor-price frontier can be established, as well as the relation of total product and interest.
Abstract: I. The simplest Austrian and more general models, 568. — II. Why reswitching can occur, 571. — III. Reswitching in a durable-machine model, 573. — IV. The well-behaved factor-price frontier, 574. — V. Unconventional relation of total product and interest, 576. — VI. Unconventional capital/output ratios, 577. — VII. Reverse capital deepening and denial of diminishing returns, 579. — VIII. Conclusion, 582.
440 citations
TL;DR: In this article, the authors proposed a monthly measure of the intensity of capital controls across 29 emerging markets, based on restrictions on foreign ownership of equities, which provides information on the extent and evolution of financial liberalization.
439 citations
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TL;DR: In this paper, the authors investigate the effectiveness of capital controls from a historical perspective and argue that market-based controls on inflows have the potential for lengthening the maturity of foreign debt and are not very effective in achieving other objectives, including a higher degree of monetary policy independence.
Abstract: In the aftermath of the East Asian crisis a number of authors have argued that capital mobility is highly destabilizing, and that emerging countries would benefit from restricting capital flows. In this paper I investigate, from a historical perspective, the effectiveness of capital controls. I deal with Tobin taxes, controls on outflows and controls on inflows. I argue that controls on outflows have seldom worked as expected. They introduce major distortions and breed corruption. Market-based controls on inflows - similar to those implemented by Chile - have the potential for lengthening the maturity of foreign debt. They are not very effective, however, in achieving other objectives, including a higher degree of monetary policy independence.
436 citations
TL;DR: This paper considers the possibility that persistent poverty may arise from a high incidence of mortality, which is introduced in a two-period overlapping generations model and depends upon health capital that can be augmented through public investment.
433 citations