Report
OECD countries: The tension surrounding the increase in capital intensity
Capital intensity (the capital-to-GDP ratio or capital-to-employment ratio) has increased in OECD countries since the turn of the century. It is normal that an increase in capital intensity leads companies to want an increase in the share of capital income in GDP, since the size of capital in relation to GDP is larger. But the problem is that the increase in capital intensity in OECD countries has not led to an increase in labour productivity gains, which should normally have been the case. Employees in OECD countries have then been doubly penalised by: The weakening of productivity gains, leading to weaker real wage growth; The fall in the weight of wages in GDP, since more capital-intensive companies want an increase in the weight of profits (capital income) in GDP.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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