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 ?
For selected years, Table 1 summarizes the [p.sup.N] N/[p.sup.Y] Y ratios based on the new, country-specific initial capital stocks compared to the previous method, where all countries had the same initial capital-output ratio. For our full sample of countries, the rising trend in the [p.sup.N] N/[p.sup.Y] Y ratios observed in Chart 1 is confirmed: the average [p.sup.N] N/[p.sup.Y] Y ratio climbs from 2.1 in 1950 to 3.5 in 2000.
This yields 1.49 as the target for the capital-output ratio.
If crises affect the capital-output ratio, it should have an impact on the labour share also.
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.S.
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.
These results also depend critically on the rate of technical depreciation and the capital-output ratio. Our assumptions look well founded on the former so we will not introduce any change in this respect.
Tamil Nadu and Gujarat dominate among the other states in terms of capital-output ratio in the industrially developed states.
While the Harrod-Domar growth model perceived the capital-output ratio, v, as a constant in the warranted growth expression, s/v, the dual theory considers it as a variable.
The observed stability of output and capital growth rates and the capital-output ratio are part of the "stylized facts" of growth (Kaldor 1957, 1961).
Thus, an interesting feature of the long-run equilibrium is that it is possible to have a higher capital-output ratio with the same level of the wage share.
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.
sY/[DELTA]Y [equivalent to] [DELTA]K/[DELTA]Y, so that [DELTA]Y/Y [equivalent to] g [equivalent to] s [DELTA]Y/[DELTA]K [equivalent to] s/q, where q is the incremental capital-output ratio and g is the rate of growth.