Capital-Output Ratio


Also found in: Financial.

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.

L. E. BABASHKIN

References in periodicals archive ?
These studies imply that the capital-output ratio, factor shares, and productivity growth play crucial roles in the decline of real rates of interest and corporate profit rates, which leads to low capital accumulation.
To this end, we first try to find out how the fundamental parameters impact the steady-state value of the capital-output ratio in (21).
Nevertheless, our empirical strategy will identify the effect of crises mainly through the bargaining channel, as we will also control for the capital-output ratio in the empirical specification.
When agents have standard CRRA preferences, we choose the value of the time-discounting factor, [beta], in such a way that the model economy's capital-output ratio matches the long-term average of the U.
We estimate underlying trend growth through the assumption that labour force participation and average hours of work remain constant at the average levels of 2006-7, while relative factor prices also remain stable, so that the desired capital-output ratio and energy intensity of production are constant.
In spite of feeling less confident on the latter, we will stick to the above estimates of the welfare cost for two reasons: a) According to Nehru and Dhareshwar (1993), for the period 1976-2006 it seems appropriate to set the capital-output ratio for the leading group and Latin America at 3; Coremberg et al (2007) calculate basically the same ratio for Argentina in such period; b) Nehru and Dhareshwar (ibid) calculate that the ratio rose from 2.
Tamil Nadu and Gujarat dominate among the other states in terms of capital-output ratio in the industrially developed states.
For Kaldor and Pasinetti, the focus on capital-output ratio was important only for a first state of growth when the labor supply is not fully absorbed.
t]), the GDP growth factor is related to the growth factor of the capital-output ratio as follows:
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.