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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: In this paper, the authors consider a two-country model of overlapping generation heterogeneous economies with intergenerational transfers carried out in the form of bequest and investment in human capital.
47 citations
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TL;DR: In this article, the authors provided an update of the NESTA Innovation Index and tried to calculate some facts for the "knowledge economy", using new data sets and a new micro survey.
Abstract: This paper provides an update of the NESTA Innovation Index and tries to calculate some facts for the 'knowledge economy'. Building on the work of Corrado, Hulten and Sichel (CHS, 2005,9), using new data sets and a new micro survey, we (1) document UK intangible investment and (2) see how it contributes to economic growth. Regarding investment in knowledge/intangibles, we find (a) this is now 34% greater than tangible investment, in 2009, £124.2bn and £92.7bn respectively; (b) that RD (d) the most intangible-intensive industry is manufacturing (intangible investment is 17% of value added) and (e) treating intangible expenditure as investment raises market sector value added growth in the 1990s due to the ICT investment boom, but has less impact on aggregate measures of growth in the 2000s. Regarding the contribution to growth, for 2000-09, (a) intangible capital deepening accounts for 26% of labour productivity growth, against computer hardware and telecommunications equipment combined (16%) and TFP (-0.4%); (b) adding intangibles to growth accounting lowers TFP growth by about 18 percentage points (c) capitalising R&D adds 0.04% to input growth and reduces ΔlnTFP by 0.02% and (d) manufacturing accounts for 47% of intangible capital deepening plus TFP.
47 citations
TL;DR: In this paper, the authors consider the impact of population aging on the economy and propose several policy responses, such as increasing the size of the labor force, mainly by raising the retirement age, reducing benefits and/or raising taxes for public transfer programs for the elderly, with concern for deadweight loss and the fair distribution of costs across socioeconomic classes; investing more in children to increase the quality and productivity of the future labor force; and public programs that promote fertility by facilitating market work for women with children.
Abstract: Inevitable population aging and slower population growth will affect the economies of all nations in ways influenced by cultural values, institutional arrangements, and economic incentives. One outcome will be a tendency toward increased capital intensity, higher wages, and lower returns on capital, a tendency partially offset when the elderly are supported by public or private transfers rather than assets, and when economies are open, in which case aging will lead to increased flows of capital and labor. Rising human capital investment per child accompanies the falling fertility that drives population aging, and partially offsets slower labor force growth. Research to date finds little effect on technological progress or labor productivity. National differences in labor supply at older ages, per capita consumption of the elderly relative to younger ages, strength of public pension and health care systems, and health and vitality of the elderly all condition the impact of population aging on the economy. Policy responses include increasing the size of the labor force, mainly by raising the retirement age; reducing benefits and/or raising taxes for public transfer programs for the elderly, with concern for deadweight loss and the fair distribution of costs across socioeconomic classes; investing more in children to increase the quality and productivity of the future labor force; and public programs that promote fertility by facilitating market work for women with children.
47 citations
TL;DR: In this article, the authors studied the properties of demand for capital maintenance services and its interaction with investment under variable capital utilization rate and adjustment costs, and showed that the marginal efficiency of maintenance decreases or increases when the rate of capital utilization rises.
Abstract: This paper studies the properties of demand for capital maintenance services and its interaction with investment under variable capital utilization rate and adjustment costs. The depreciation rate varies with the maintenance effort and the utilization rate of capital. We show that the properties of the demand functions for maintenance services and capital goods depend closely on the sign of the cross derivative of the depreciation function, i.e., on whether the marginal efficiency of maintenance decreases or increases when the rate of capital utilization rises. In our model, it is impossible to reconcile some unquestionable empirical facts and some minimal regularity conditions on the demand function for maintenance services if this cross derivative is positive. In all cases, investment and maintenance are gross complements.
47 citations
TL;DR: In this article, the authors analyzed the links between growth and public capital accumulation for a panel of 28 developing countries over eleven years (1981-1991) and found that the majority of the sample countries tended rather to diverge from the optimal allocation of capital in terms of growth between public and private sectors.
Abstract: This paper analyses the links between growth and public capital accumulation for a panel of 28 developing countries over eleven years (1981-1991). We estimate a simultaneous equations model to explain the GDP, as well as public and private capital formation. Accumulating public, private and human capital enhances growth. Nevertheless, public capital formation has produced an indirect crowding-out effect, since the budget constraint was differentiated between public and private sectors. Our results suggest that the majority of the sample countries tended rather to diverge from the optimal allocation of capital in terms of growth between public and private sectors.
47 citations