Physical capital
Oxford Dictionary of Economics:
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Physical Capital
Capital in the form of physical goods, either fixed capital or stocks and work in progress. Physical capital is contrasted with both financial and human capital. Financial capital includes both cash holdings of firms, and net trade credit extended to customers. Human capital includes both technical know-how, whether or not embodied in patents , and the skills of the workforce. The ability of economies to recover rapidly after wars and natural disasters is thought to indicate that physical capital is less important than human capital as a long-run determinant of productivity.
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Physical capital
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In economics, physical capital or just 'capital' refers to a factor of production (or input into the process of production), such as machinery, buildings, or computers. The production function takes the general form Y=f(K, L), where Y is output, K is capital stock and L is labor. In economic theory, physical capital is one of the three primary factors of production, also known as inputs in the production function. The others are natural resources (including land), and labor — the stock of competences embodied in the labor force. "Physical" is used to distinguish physical capital from human capital (a result of investment in the human agent)) and financial capital.[1][2] "Physical capital" may also refer to fixed capital, any kind of real or physical asset that is used up in the production of a product, as distinguished from circulating capital.
See also
Notes
- ^ Paul A. Samuelson and William D. Nordhaus (2004). Economics, 18th ed., Glossary of Terms"Factors of production," "Capital," "Human capital," and "Land."
- ^ Deardorff's Glossary of International Economics, Physical capital.
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Oxford Dictionary of Economics
A Dictionary of Economics. © 2008
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