How do capital and sustainability relate?

Question

Economics.

Answer 1

Capital stock is a measure of annual productive capacity of an economy for the next few years.. Through investments, this capacity is sought to be expanded continuously so that the potential GDP continue to increase over time.

Therefore unless capital continues to grow and productivity of capital continues to grow, economic growth of a country cannot be sustained. That is why investment rate is a critical factor to economic development and growth. Even to maintain constant output/ GDP at a given level  continous investment is necessary to offset the loss of capacity of old depreciated/ worn of capital equipmenrs.

Unless economic growth occurs, incomes will not increase, savinmgs willnot increase and investmnt will not increase and capital cannot grow. So for sustainability of capital, sustainable growth in income of the nation is necessary.