Capital-Output Ratio

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Capital-Output Ratio


the value of fixed production assets per unit of output. In socialist economies, the capital-output ratio is used in economic analysis and in formulating production and capital construction plans for the national economy as a whole and for individual sectors and enterprises (associations). Data on the gross social product and the produced national income can be used to analyze the capital-output ratio of the national economy, while data on gross (market) or net output can be used to analyze the ratios of individual sectors.

A distinction is made between the direct and the full capital-output ratio. The direct ratio is calculated as the ratio of the fixed assets of a given sector to that sector’s output in monetary terms. The full capital-output ratio takes into account not only the fixed assets that are directly involved in the output of a sector but also the assets functioning in sectors that figure indirectly in production. Coefficients of the full capital-output ratio were calculated for the first time during the preparation of the intersectorial balance sheet for 1966 of the national economy’s fixed capital stock. The relationship between the full and direct capital-output ratios varies from sector to sector; it is determined by the nature of production and of intersectorial relations. The direct capital-output ratio is inversely proportional to capital productivity.


References in periodicals archive ?
The capital-output ratio in the country at the 90th percentile of the world income distribution is over three times the capital-output ratio in the 10th percentile country.
Barrell (2009) illustrates that the magnitude of the output scars suffered from this channel depend both on the magnitude of the rise in the user cost of capital and on the initial capital-output ratio of the economy.
Factor loadings values indicates that output, capital-output ratio, and ratio of wages of skilled to unskilled workers are coming under component two; this component has been named as domestic factors and ratio of FDI to GDP and ratio of total trade to GDP is coming under factor one; this factor is named as external factors.
A sampling of topics: the gains from international trade, protection and real wages, a reconsideration of the theory of value, the basic theorems of classical welfare economics, the economic implications of learning by doing, economies with a finite set of equilibria, and the influence of the capital-output ratio on real national income.
Another common way of computing the initial capital stock is to assume that the country is at its steady state capital-output ratio, leading to what is termed steady-state capital stock (Ks).
It includes, such factors as: (i) productivity, (ii) input-output ratio, and (iii) capital-output ratio.
Equating the two equations for investment provides a growth path for income that is driven mainly by savings, as the capital-output ratio is constant, i.
This paper measures the return to capital in China, calculated using data on the share of capital in total income, the capital-output ratio (where both capital and output are measured at market prices), the depreciation rate, and the growth rate of output prices relative to capital prices.
5 over this time period, the capital-output ratio remained roughly constant before 1930 and after 1950.
Given a value for [delta], we choose the initial capital stock so that the capital-output ratio is the same in 1954 as its average over the period 1954-1970.
It is also possible to calculate the effect on consumption and capital of a policy change because it is known how the consumption-output ratio and the capital-output ratio (or productivity of private capital) respond as well as how output responds.
Using a putty-clay model of production and capital accumulation, Gilchrist and Williams capture many of the key empirical properties of Germany's and Japan's postwar experience, including persistently high but declining growth rates of labor and total factor productivity, the U-shaped response of the capital-output ratio, relatively stable investment-output ratios, and reasonable rates of return to capital during the transition path.