Friday, August 31, 2012

Lowest Net Growth In US Net Capital Stock In 60 Years

Net capital stock growth is positive when investments are greater than depreciation.  The capacity of an economy, and its productivity, are dependent upon growth in the capital stock.  For the first time in 60 years growth in capital stock has fallen to the rate of depreciation.  This has not happened in 60 years of history, so we don't know how to interpret it.  It can't be a good sign for the future of the economy if that persists.

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