At the level of either a production process or the aggregate economy, it may be estimated by the capital to labor ratio, such as from the points along a capital/labor isoquant.
However recent economic research has invalidated that theory, since Solow did not properly consider changes in both investment and labor inputs.
[3] Some economists claimed that the Soviet Union missed the lessons of the Solow growth model, because starting in the 1930s, the Stalin government attempted to force capital accumulation through state direction of the economy.
[citation needed] Therefore, other factors besides capital accumulation must have been big contributors to the Soviet economic crisis.
Monetary stability (which increases confidence), low taxation, and greater freedom for the entrepreneur would then promote capital accumulation.
The term came about in the mid- to late-nineteenth century as factories such as steel mills sprung up around the newly industrialized world.
This makes new capital-intensive factories with high tech machinery a small share of the marketplace, even though they raise productivity and output.