[quote carlsbadworker]
I have a different theory. When I look at China’s economy, the biggest issue that I have with it is its low capital efficiency:
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Thanks for the link. Interesting paper. I did notice that they don’t seem to account for the time lag of Capital Expenditure to revenue generation from Capital Expenditure. Under growth conditions greater than about 10%/yr, this can make it look like you are not making efficient use of capital. It take time for plant and equipment purchases to start making a return on investment.
I was hoping that they were going to cover more on “revenue productivity of labor”, but they were unable to segregate high tech from manual. I think this is where some divergence will be seen.
