Final answer:
Capital deepening is an increase in capital per worker and is a vital pillar of economic growth. It can enhance an economy's productivity and, in a supportive policy environment, lead to substantial improvements in GDP per capita.
Step-by-step explanation:
Capital deepening refers to an increase in the amount of capital per worker in an economy. This increase can be in the form of either human capital, such as higher education or skills, or physical capital, like machinery or technology. Capital deepening falls under the pillar of growth within an economic context, as it is crucial for enhancing an economy's productivity and potential for long-term growth. The linkage between capital deepening and growth is largely attributed to the boost in productivity that typically comes when workers have more capital at their disposal.
A significant determinant of an economy's rate of long-term growth is the rate of productivity growth, which can be influenced by capital deepening. In a market-oriented environment with supportive public policies and institutions, the increase in capital per worker can lead to substantial improvements in GDP per capita over time. Therefore, capital deepening is an essential component of a healthy economic growth climate, alongside improvements in technology and supportive economic policies.