IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-1-137-27179-2_4.html
   My bibliography  Save this book chapter

Capital Investment: A Neglected Issue

In: The Unbalanced Economy

Author

Listed:
  • Ciaran Driver

    (University of London)

  • Paul Temple

    (University of Surrey)

Abstract

The lack of concern for capital investment among UK policymakers is to some extent puzzling because, as noted in Chapter 2, it provided a mainstay of economic beliefs up to the 1980s, and remains important for growth theory. What exactly are many economists objecting to when they criticize the ‘exaggerated belief in the importance of promoting investment’ (Crafts 1991, p.89)? At one level the argument is hard to follow because there is a clear correlation between investment and other inputs that are indeed thought to be important. According to Crafts himself, any long-run success of 1980s policies was limited, because of the neglect of training and technology solutions ‘for which the present (Conservative) government has a distaste’ (p.95). But saying this, while dismissing the importance of capital investment, requires a convoluted argument. What does promoting investment mean if not associated acceleration in technology and training? Are firms likely to invest in irreversible expensive equipment without ensuring that it can be well used? Is not one of the obstacles to such investment that workers can be poached after training? And what is technology but a broad form of irreversible investment? The correlations between forms of investment are high. For example, the correlation between training and machinery equipment and software is 0.39 for manufacturing and 0.58 for services (Bulli 2008, Tables 3 and 4).

Suggested Citation

  • Ciaran Driver & Paul Temple, 2012. "Capital Investment: A Neglected Issue," Palgrave Macmillan Books, in: The Unbalanced Economy, chapter 4, pages 71-86, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-137-27179-2_4
    DOI: 10.1057/9781137271792_4
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-1-137-27179-2_4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.