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Physical capital
 
 
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In general physical capital refers to any non-human asset made by humans and then used in production. Often, it refers to economic capital
Capital (economics)

In economics, capital or capital goods or real capital refers to factors of production used to create goods or services that are not themselves significantly consumed in the production process....
 in some ambiguous combination of infrastructural capital
Infrastructural capital

Infrastructural capital refers to any physical means of production or means of protection beyond that which can be gathered or found directly in nature, i.e....
 and natural capital
Natural capital

Natural capital is the extension of the economic notion of capital to environmental goods and services. Natural capital is thus the stock of natural ecosystems that yields a flow of valuable ecosystem goods or services into the future....
. As these are combined in process-specific and firm-specific ways that neoclassical
Neoclassical economics

Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distribution s in markets through supply and demand, often as mediated through a hypothesized maximization of income-constrained utility by individuals and of cost-constrained profits of firms employing avai...
 macroeconomics
Macroeconomics

Macroeconomics is a branch of economics that deals with the performance, structure, and behavior of a national or regional economy as a whole....
 does not differentiate at its level of analysis, it is common to refer only to physical vs. human capital
Human capital

Human capital refers to the stock of skills and knowledge embodied in the ability to perform Labour so as to produce economic value. It is the skills and knowledge gained by a worker through education and experience.Many early economic theories refer to it simply as labor, one of three factors of production, and consider it to be a fungible...
 and seek so-called "balanced growth" that develops both in tandem

Such analyses, however, fail to make distinctions considered critical by many modern economists.






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Encyclopedia


In general physical capital refers to any non-human asset made by humans and then used in production. Often, it refers to economic capital
Capital (economics)

In economics, capital or capital goods or real capital refers to factors of production used to create goods or services that are not themselves significantly consumed in the production process....
 in some ambiguous combination of infrastructural capital
Infrastructural capital

Infrastructural capital refers to any physical means of production or means of protection beyond that which can be gathered or found directly in nature, i.e....
 and natural capital
Natural capital

Natural capital is the extension of the economic notion of capital to environmental goods and services. Natural capital is thus the stock of natural ecosystems that yields a flow of valuable ecosystem goods or services into the future....
. As these are combined in process-specific and firm-specific ways that neoclassical
Neoclassical economics

Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distribution s in markets through supply and demand, often as mediated through a hypothesized maximization of income-constrained utility by individuals and of cost-constrained profits of firms employing avai...
 macroeconomics
Macroeconomics

Macroeconomics is a branch of economics that deals with the performance, structure, and behavior of a national or regional economy as a whole....
 does not differentiate at its level of analysis, it is common to refer only to physical vs. human capital
Human capital

Human capital refers to the stock of skills and knowledge embodied in the ability to perform Labour so as to produce economic value. It is the skills and knowledge gained by a worker through education and experience.Many early economic theories refer to it simply as labor, one of three factors of production, and consider it to be a fungible...
 and seek so-called "balanced growth" that develops both in tandem

Such analyses, however, fail to make distinctions considered critical by many modern economists. Natural capital grows, while infrastructural capital must be built. Even "balanced" economic growth
Economic growth

Economic growth is the increase in the amount of the goods and services produced by an economics over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP....
 includes many processes thought to be, or lead to, uneconomic growth
Uneconomic growth

Uneconomic growth, in human development theory, welfare economics , and some forms of ecological economics, is economic growth that reflects or creates a decline in the quality of life....
. Human capital requires rest and must make choices whether to seek rest or income, which physical capital does not make: this is the rest problem.

Accordingly, the designation as "physical" has come into some recent dispute.

See also


  • Harrod-Domar model
    Harrod-Domar model

    The Harrod-Domar model is used in development economics to explain an economy's growth rate in terms of the level of saving and productivity of Capital ....