Capital Deepening - Explained
What is Capital Deepening?
Written by J. Mance Gordon
Updated at April 23rd, 2024
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What is Capital Deepening?
When society increases the level of capital per person, we call the result capital deepening. The idea of capital deepening can apply both to additional human capital per worker and to additional physical capital per worker.
Recall that one way to measure human capital is to look at the average levels of education in an economy.
The idea of human capital deepening also applies to the years of experience that workers have.
Growth in technology is another factor leading to capital deepening. It improves the learning methods and abilities of the worker.
This recipe for economic growth—investing in labor productivity, with investments in human capital and technology, as well as increasing physical capital—also applies to other economies.
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- Compound Growth Rate
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- Infrastructure
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- Resource Curse
- Capital Deepening
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