capital–labour ratio

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The amount of capital per unit of work. The capital–labour ratio is at the heart of the ‘one-sector regional growth model’ (McCombie (1998) Urb. Studs 25): as people move from lower real waged cities-regions to higher ones, the capital–labour ratio in stronger regions decreases, and increases in weaker regions. The process stops as soon as the capital–labour ratio is the same in all regions. P. McCann (2001) shows how, in time, this development improves the welfare of society as a whole.

Subjects: Earth Sciences and Geography.

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