The Review of Economics and Statistics Vol. 51 No. 4 1969
Sectoral Output-Capital Ratios and Levels of Economic Development: A Cross-Sectional Comparison of Manufacturing Industry
Abstract
T HE concept of the capital-output ratio has played an almost indispensable part in economic planning in underdeveloped countries, notwithstanding numerous theoretical objections. The range of areas in which the concept is brought into play stretches from judgement-free projections of capital requirements and of future growth rates to the wise man's role of setting an acceptable target rate of growth and of selecting investment criteria. However, progress has been seriously hampered partly because the available empirical evidence has been very limited in the coverage of various countries and also in the level of sectoral disaggregation.' In the present paper, we make use of certain new data whose analysis seems to suggest that the conventional notion of relative factor-endowments and choice of production techniques needs to be re-examined. The main objectives of this study are two: first, we present a comprehensive statistical analysis of detailed sectoral output-capital ratios for a large number of countries. Second, in doing so, this paper will point to a surprising characteristic of present-day economic underdevelopment. This evidence has a significant bearing on a number of related topics.
- DOI
- 10.2307/1926437
- Volume
- 51
- Issue
- 4
- Pages
- 453
- Sources
- openalex crossref