Capital Productivity (λ)

Definition

The value generated per dollar deployed in a single cycle. In extractive models, λ must exceed 1 + interest rate for the system to survive. In regenerative models, even λ slightly above 1 can compound to massive system value over time.

Formula

Example

A workforce training program with λ = 1.5 generates $150K of economic value from a $100K deployment. Over multiple PSC cycles, this compounds dramatically.

Source

RCT Section 4.2