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Mike Mellor's avatar

Back of an envelope, 17% investment rate looks reasonable. Two reliable guides to the price you should pay for anything are super-profits and payback period. But a lot of the 17% doesn't turn into growth. Why, because a lot of it is replacement. Once an asset is fully depreciated for tax purposes, it disappears from the radar. If I said that ninety per cent of the productive assets of an economy are sitting on the books at nil value, there's no way you could disprove me.