12. Productivity - capital efficiency

Improvement in machinery efficiency can raise the production capacity of an economy. Alternatively, the same amount of output can be produced with less capital, which makes production less capital intensive, with the usual measure of capital. If, however, capital is measured in efficiency units, production will become more capital intensive, which raises productivity and production in the long run.


hmtoggle_arrow1A. Capital efficiency
hmtoggle_arrow1B. Capital efficiency - including supply effects on exports
hmtoggle_arrow1C. Capital efficiency - balanced budget