Date of Award


Degree Type



School of Arts and Sciences

Degree Name




First Advisor

Dr. Charlie Carter


This thesis offers a theoretical analysis of the need to redefine capital. More specifically it argues that the concept of capital, as generally defined, needs to bebroadened. Empirical support is evaluated by reviewing evidence from other studies. This study suggests that the ambiguous concept of capital can be minimized by subdividing it into three homogeneous categories. The three categories are as follows: Capital One -—labor and equipment; Capital Two worker’s training and technology; Capital Three—-science research and education. It is argued in this thesis that only Capital Two is crucial to production and significantly contributes to economic growth. In this thesis these three categories are classified according to their effect on production, timing of return, and degree of risk. A simple model describing their relationship is offered. The evolution of production, the development of capital theory, and the limited empirical estimates support the thesis advanced in this paper. The standard procedure of constrained maximization demonstrates that output growth per capita depends on the optimal allocation of both worker training input and technology input.