Capability Return (REA)

γ (gamma)

Definition

The value generated per dollar deployed beyond the capital itself. γ > 1.0 means each deployment creates additional value; γ = 1.0 means break-even; γ < 1.0 means value destruction.

Formula

γ = Total Value Generated / Capital Deployed

Example

Education funding with γ = 1.7 generates $170K of economic value (higher earnings, productivity) from a $100K scholarship. This capability return compounds with recycling.

Source

REA Section 3.2

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Related Terms from Regenerative Economic Architecture

Regenerative Economic Architecture (REA)

Four Structural Invariants (REA)R, γ, Δ, Λ

Recycling Rate (REA)R

Regenerative Compounding Formula

Capital Phase Space

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Regenerative Economic Architecture