Capital deepening

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

Measuring Social Capital: The Danish Co‐operative Dairy Movement

Abstract: What are the roots of social capital and how can it be measured and built? Social capital is considered as a new production factor that must be added to the conventional concepts of human and physical capital. Social capital is productive because it increases the level of trust in a society and allows more transactions to take place without third-party enforcement. Theory and lessons from empirical evidence lead to the general recommendation that any loss in social capital must be deducted from the economic gain following market forces. For example, the voluntary organization of small-sized groups in the Danish Co-operative Dairy Movement was eliminated due to economies of scale. It may be so that an alternative way of production, taking social capital into ac-count, could have increased economic growth further.

Recent Declines in Labor's Share in US Income: A Preliminary Neoclassical Account

Abstract: As shown in the 1930s by Hicks and Robinson, the elasticity of substitution (σ) is a key parameter that captures whether capital and labor are gross complements or substitutes. Establishing the magnitude of σ is vital, not only for explaining changes in the distribution of income between factors but also for undertaking policy measures to influence it. Several papers have explained the recent decline in labor's share in income by claiming that σ is greater than 1 and that there has been capital deepening. This paper presents evidence that refutes these claims. It shows that despite a rise in measured capital-labor ratios, labor-augmenting technical change in the United States has been sufficiently rapid that effective capital-labor ratios have actually fallen in the sectors and industries that account for the largest portion of the declining labor share in income since 1980. In combination with estimates that corroborate the consensus in the literature that σ is less than 1, these declines in the effective capital-labor ratio can account for much of the recent fall in labor's share in US income at both the aggregate and industry level. Paradoxically, these results also suggest that increased capital formation, ideally achieved through a progressive consumption tax, would raise labor's share in income.

Contribution of information and communication technologies to growth

Abstract: Contribution of Information and Communication Technologies to Growth is part of the World Bank Working Paper series. These papers are published to communicate the results of the Bank's ongoing research and to stimulate public discussion. The worldwide development of information and communication technology (ICT) has accelerated dramatically over the past decade. Technological advances and increased competition have led to falling prices for ICT goods and services, which has provided a strong incentive to replace other forms of capital and labor with information technology equipment. Increased ICT production and use has the potential to create job opportunities, transfer skills, and increase efficiency and transparency in politics and business, and therefore, contribute to economic growth. This paper focuses on the linkage between ICT and output growth. It summarizes findings in the literature on the contribution of information and communication technology to economic growth arising from capital deepening and increases in total factor productivity. The paper contains: the methodologies used to evaluate the different ways ICT influences productivity growth; a critical assessment of the magnitude of ICT's contribution to growth in various countries; a summary of the key factors that increase and obstruct ICT expansion; and an outline of the challenges developing countries face in maximizing ICT's contribution to growth and policy recommendations aimed at surmounting these challenges.