Capital deepening

About: Capital deepening is a research topic. Over the lifetime, 5203 publications have been published within this topic receiving 230297 citations.

Economic growth in south asia: role of infrastructure

Abstract: We examine the output elasticity of infrastructure for four South Asian countries viz., India, Pakistan, Bangladesh, and Sri Lanka using panel cointegration techniques for the period 1980–2005. In this context, we develop an index of infrastructure stocks and investigate the impact of infrastructure on output. The study finds a long-run equilibrium relationship between output and infrastructure along with other relevant variables, such as gross domestic capital formation (GDCF), labor force, international trade and human capital. The results reveal that GDCF, labor force, export and expenditure on human capital exhibit a positive contribution to output. More importantly, infrastructure development contributes significantly to output growth in South Asia. Further, the panel causality analysis shows that there is mutual feedback between total output and infrastructure development.

Domestic labour and capital

Abstract: The direct products of domestic labour are not commodities; such products as clean clothes and cooked meals are not produced for the market by domestic labour and are not exchanged. Rather, they are produced for the direct satisfaction, without further transformation, of the needs of the producer and her family. In this sense domestic labour is private production. But it is not only distinguished by its location in non commodity production; it is also private production in another sense. No division of labour exists within its realm. All housewives perform very similar tasks, and they perform them in isolation, unless aided by other members of their families. Neither of the types of division of labour that Marx described as operating within commodity production—the a priori division of labour between workers employed by an individual capital through the organising control and authority of the capitalist, and the a posteriori social division of labour between workers employed by different capitals which, through the market, operates via the coercive force of competition—neither of these divisions of labour touches domestic labour. The only division of labour to which domestic labour is subject is that it is divided from commodity production. Indeed, this division comprises the specific form that the sexual division of labour, in its broadest sense, takes in capitalist society.

Modelling Government Investment and Economic Growth on a Macro Level: A Review

Abstract: During the 1970s and 1980s many OECD countries have offset increases in debt interest payments and rising social security transfers by winding back public investment. Figure 14.1 shows government investment (excluding residential buildings) as a share of GDP for 18 OECD countries over the period 1970–92. The data relate to consolidated general government and have been taken from the Standardised National Accounts compiled and published by the OECD. As follows from Figure 14.1, public capital spending as a share of GDP declined or remained stable in almost all countries between 1970 and 1992. Spain and Portugal are exceptions. In order to become more competitive within the European Union, these countries undertook extensive programmes of upgrading their stock of public capital. A small rise occurred also in Italy. Another conclusion that can be drawn from figure 14.1 is that the level of government investment spending varies considerably across countries, ranging between 1.3 per cent of GDP for the UK and 5.8 per cent for Switzerland in 1992.

Understanding labour income share dynamics in Europe

Abstract: This paper seeks to understand labour share dynamics in Europe over the medium run. After documenting basic empirical regularities, we quantify the contribution of shifts in the sectoral and the employment composition of the economy to labour share movements. The findings from the shift-share analysis being on the descriptive side, we next identify the factors underlying labour share behaviour through a model-based approach. We proceed along the lines of Bentolila and Saint Paul (2003) but adopt a production function with capital-skill complementarity. We show that labour share movements are driven by a complex interplay of demand and supply conditions for capital and different skill categories of labour, the nature of technological progress and imperfect market structures. Based upon robust calibration, we show that most of the declining pattern in labour shares in nine EU15 Member States is governed by capital deepening in conjunction with capitalaugmenting technical progress and labour substitution across skill categories. Although institutional factors also play a significant role, they appear to be of somewhat less importance. To illustrate the relevance of the technological explanation we quantitatively assess the dynamic impact of a permanent reduction in the fraction of unskilled employment on the labour share. We find that, for a given elasticity of substitution between skilled and unskilled labour, the more skilled labour is complementary to capital, the more pronounced the decline in the labour share.