Capital Goods
Capital goods are physical assets used to produce goods and services. They are also known as durable goods, real capital, or economic capital. Examples of capital goods include buildings, machinery, tools, and equipment. Capital goods are used to produce other goods and services, and are not consumed in the process. They are typically long-term investments, and are used to increase the efficiency of production.
History of Capital Goods
The concept of capital goods has been around since the early days of economics. In the 18th century, Adam Smith wrote about capital goods in his book The Wealth of Nations. He argued that capital goods are essential for economic growth, and that they should be used to increase the productivity of labor. In the 19th century, Karl Marx wrote about capital goods in his book Das Kapital. He argued that capital goods are a form of capital, and that they should be used to increase the efficiency of production.
In the 20th century, economists began to focus more on the role of capital goods in economic growth. They argued that capital goods are essential for economic growth, and that they should be used to increase the efficiency of production. This led to the development of the concept of capital deepening, which is the process of increasing the amount of capital goods in an economy.
Comparison of Capital Goods
| Capital Goods | Consumption Goods |
|---|---|
| Used to produce goods and services | Used to satisfy consumer needs |
| Long-term investments | Short-term investments |
| Increase efficiency of production | Increase satisfaction of consumer needs |
Summary
Capital goods are physical assets used to produce goods and services. They are also known as durable goods, real capital, or economic capital. Examples of capital goods include buildings, machinery, tools, and equipment. Capital goods are used to produce other goods and services, and are not consumed in the process. They are typically long-term investments, and are used to increase the efficiency of production. For more information about capital goods, you can visit websites such as Investopedia, The Balance, and Investing.com.
See Also
- Capital Intensity
- Capital Investment
- Capital Structure
- Capital Expenditure
- Capital Budgeting
- Capital Market
- Capital Stock
- Capital Flow
- Capital Gains
- Capital Losses
