StudentShare solutions
Triangle menu

Capital Accumulation - Essay Example

Not dowloaded yet

Extract of sample
Capital Accumulation

There are several factors that could determine a country's economic progression. It could be as diverse aspects as the availability of roads and infra-structural facilities as the quality of education and the significant technological prowess the country is able to wield in the comity of nations.
Resorting to Foreign Direct investments and equity participation of foreign governments or public/ private agencies in investments of government and/or private sectors and also capital repatriation from NRI's
In the context of capital accumulation, the Harrod-Domar Model assumes significance since it is a determinant of the growth rate G. If Y could be represented as GDP and S=Savings, then the growth of savings is determined by GDP-S=SY.
The Investments represented by I is an important determinant for the produce as well as increase in capital. Thus, K = Y. Thus, it could be said that for the equilibrium point to be reached, a consensus needs to be made between demand and supply of a country's produce. Hence I = S.
This model is important since the equilibrium growth rate of the output = Ratio of the marginal propensity to save and the capital=output ratio. How the economy is growing is based on the growth of the capacity of the economy to produce as compared with the demand of the produce of the state.
By putting to use this example, it is proposed to take a hypothetical instance of capacity production level at 1000/year and a capital-output ratio of 3. Therefore capital stock is 3000.
If, in this hypothetical instance, the marginal propensity to consume out of the Gross Domestic Product (GDP) is 0.7, then the marginal propensity to save is 0.3, which is inclusive of all types of savings. The equilibrium growth rate = propensity to save/capital output ratio, and in this case, it would be 0.3/3 or 10% annual growth rate.
Now applying the current GDP of 1000 level of savings = 1000x.3= 300.
Similarly the growth rate is 0.1x1000 = 100.
And finally, the capital output ratio for the additional capital = 3x100= 300.
Thus, the position in this hypothetical case is safe in that the level of increased investments matches the available savings of 300. In other words the increased level of ...Show more

Summary

In pristine terms, capital accumulation refers to the creation of wealth by nations. This formation of wealth is generated through productive use of assets, for which investments are made, and which may used, either for consumption purposes, or for generating further assets value.
Author : mmonahan
Capital Accumulation essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Capital Accumulation"
with a personal 20% discount.
Grab the best paper

Related Essays

Capital Accumulation for Beautiful You Ltd
Very often managements need to take decisions on the basis of future forecasts rather than making reference to past experiences or current developments. However, with regard to share issuance or borrowing, management will have to comply with certain aspects of the company law.
10 pages (2500 words) Essay
Golden Rule of Capital Accumulation and Macroeconomic Policy
This is the neo-classical model of economic growth. In 1946, Robert Solow and T. W. Swan independently developed this exogenous growth model. This steady state rate of growth is consistent with the economy’s natural rate of output. Policymakers use this model to understand why different countries grow at different rates and this is the main relevance of this model.
6 pages (1500 words) Essay
Views of Marx and J.S.Mills on Accumulation and Crises
S Mills and Marx. However, the paper will concentrate on comparing and contrasting the views held by Marx and Mills on accumulation of capital and crises. The paper will thus focus on the crisis theory and theory of surplus value by Marx and the principles of the political economy by J.S Mills.
4 pages (1000 words) Essay
Explain Marx's general law of capitalist accumulation and discuss it's contemporary relevance
Although the term itself has been in existence for far longer than the Communist understanding of the way in which global economics takes place, it was Marx who most clearly elucidated and defined this concept. Although many of Karl Marx theories and understandings were inexorably linked to a rather slanted and biased view against capitalism as a means of defining global economics, Marx understanding of “capital accumulation” can almost invariably be accepted as a perfect textbook definition.
12 pages (3000 words) Essay
Global Civilization Formal Essay on So Called Primitive Accumulation by Karl Marx
He refers to this as primitive because it forms the pre-history of the mode of production as corresponding to capital (Marx 874-875). The private property in this case belongs to the individuals who own both the labor and the property as opposed to social or collective property.
3 pages (750 words) Essay
Solow Growth Model
He argued that an economy using exhaustible resources can still maintain high standards of living; technological progress was one of the factors that would help achieve high levels of technological growth and also the existence of capital accumulation. Solow gave three preposition about the model, first he assumed that technology was constant therefore E ct was zero, If K/L remains constant and D/L approached zero as the natural resources get depleted then Y/L will eventually approach zero.
4 pages (1000 words) Essay
Communication and Global Capital Accumulation
Enabled by the phenomenon of capital accumulation, the tools of this revolution have further contributed to increased capital accumulation. Indeed, the emergence of the Internet as a medium for communication, an arena for the production and redefinition of culture and the formation of cross-national/cross-ethnic communities has fundamentally altered the nature of communication and conceptualisations of both culture and society.
4 pages (1000 words) Essay
Macroeconomics & International Finance for Business
Despite Marxist theories identifying capital accumulation as bourgeoisie and amassing of wealth by capitalists as anti-people, by way of subjugating poor and oppressed masses, it is an undeniable fact that this predominant concept of modern day business has acquired added
6 pages (1500 words) Essay
Robert E. Hall and Charles I. Jones (1999), Why Do Some Countries Produce So Much More Output per Worker than Others,Quarterly Journal of Economics, 83-116
Particularly, their research tries to identify the reasons why resources are diverted away from capital accumulation, as this diversion lead some countries to invest less in education and physical capital,
5 pages (1250 words) Essay
Define the terms constant capital, variable capital, and surplus value. What role do these three factors play in the process of capital accumulation
On the other hand, capital is durable and it is used in generation of wealth through investments. For instance, patents, brand names, automobiles and software are all inputs that are used to create wealth. Apart from production, capital
6 pages (1500 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation