Capital Consumption Allowance

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The Capital Consumption Allowance (CCA) is the portion of the Gross Domestic Product (GDP) which is due to depreciation. The Capital Consumption Allowance measures the amount of expenditure that a country needs to undertake in order to maintain, as opposed to grow, its productivity. The CCA can be thought of as representing the wear-and-tear on the country's physical capital, together with the investment needed to maintain the level of human capital (e.g. to educate the workers needed to replace retirees).

Calculation[edit]

Gross Domestic Product (GDP) equals Net Domestic Product (NDP) plus Capital Consumption Allowance plus Indirect Taxes (less subsidies; sales and excise taxes).

GDP = NDP + CCA + Indirect Taxes