Research on Efficiency of Physical Capital and Human Capital in China's Economic Growth

Abstract

Research on economic growth in the past concerns only with physical capital and human capital in the absolute amount of effects at the expense of the efficiency of the present situation, we use the 1981-2008 China's annual time-series data, with uniform measurement to build econometric models to study China's economic growth in the efficiency of physical capital and human capital. Our research results indicate that in the long term, human capital is of much higher output efficiency than physical capital; In the short term, increased input ratio of human capital causes average labour output to grow sustainably, and increased input ratio of physical capital only between the 1th and 2nd period dues to rapid increase in average labour output and then declined rapidly.