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Euro Area Investment: the Generation of GDP Growth and the Marginal Product of Capital


  • Ryan, Mary

    (Central Bank and Financial Services Authority of Ireland)


Reviewing economic performance over the past three decades, it is apparent that GDP growth in the US has been faring better than that in the Euro Area. This paper aims to identify periods where growth rates have diverged between the two economic areas with particular focus on the role of investment as a means of accumulating productive capital stock. The relative importance of capital in GDP growth is assessed for the US, Euro Area aggregate and individual Member States. Investment growth rates for the Euro Area are reviewed on a disaggregated basis, noting the relative contributions of each country to the total. Finally, the Marginal Product of Capital is calculated for each country, with a view to assessing whether disparities in investment growth rates between Euro Area countries can be understood in this context.

Suggested Citation

  • Ryan, Mary, 2009. "Euro Area Investment: the Generation of GDP Growth and the Marginal Product of Capital," Research Technical Papers 15/RT/09, Central Bank of Ireland.
  • Handle: RePEc:cbi:wpaper:15/rt/09

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