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Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset with the goal of increasing the initial monetary value of said asset as a financial return whether in the form of profit, rent, interest, royalties or capital gains. The aim of capital accumulation is to create new ...
The Solow–Swan model or exogenous growth model is an economic model of long-run economic growth. It attempts to explain long-run economic growth by looking at capital accumulation, labor or population growth, and increases in productivity largely driven by technological progress. At its core, it is an aggregate production function, often ...
Capital accumulation: production for profit and accumulation as the implicit purpose of all or most of production, constriction or elimination of production formerly carried out on a common social or private household basis. Commodity production: production for exchange on a market; to maximize exchange-value instead of use-value.
The Uzawa–Lucas model is an economic model that explains long-term economic growth as consequence of human capital accumulation. Developed by Robert Lucas, Jr., [1] building upon initial contributions by Hirofumi Uzawa, [2] it extends the AK model by a two-sector setup, in which physical and human capital are produced by different technologies.
The Harrod–Domar model makes the following a priori assumptions: 1: Output is a function of capital stock only (labor is irrelevant). 2: The marginal product of capital is constant; the production function exhibits constant returns to scale. This implies capital's marginal and average products are equal. 3: Capital is necessary for output.
v. t. e. The Ramsey–Cass–Koopmans model, or Ramsey growth model, is a neoclassical model of economic growth based primarily on the work of Frank P. Ramsey, [1] with significant extensions by David Cass and Tjalling Koopmans. [2][3] The Ramsey–Cass–Koopmans model differs from the Solow–Swan model in that the choice of consumption is ...
The First Five-Year Plan stressed investment for capital accumulation in the spirit of the one-sector Harrod–Domar model. It argued that production required capital and that capital can be accumulated through investment: the faster one accumulates capital through investment, the higher the growth rate will be. The most fundamental criticisms ...
The equation for the accumulation of capital is ' = + +. Here, C' is the value created during the production process. Here, C' is the value created during the production process. C' is equal to constant capital plus variable capital plus some extra amount of surplus value (s) which arises out of variable capital.