The rise in capital intensity in OECD countries: A puzzle and a problem

Capital intensity (the ratio of capital to GDP) has risen in OECD countries since the 1990s, whether one looks at capital including or excluding construction and in real or nominal terms. First, this trend is surprising: Given the rise of the intangible economy (online platforms, artificial intelligence, etc.), one may have thought that human capital would become essential and that capital intensity would fall; G iven automation and the emergence of sophisticated equipment, one may have thought that the productivity of capital would increase. It also creates problems: Ever-more capital must be financed; Capital income must increase at the expense of labour income; The rise in capital intensity has not driven up labour productivity and is therefore inefficient.