According to MIT economist Robert Solow, in the absence of a change in technology, a 1 percent increase in capital per hour of labor

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This is known as the "Solow productivity paradox" and is based on the production function Y = F(K,AL), where Y is real GDP, K is physical capital, L is labor, and A is the level of technology. In the absence of technology change (i.e. A is constant), an increase in K leads to a smaller and smaller increase in Y due to diminishing returns to capital. Solow estimated that in the long run, a 1 percent increase in K per hour of labor leads to a 1/3 (0.33 percent) percent increase in real GDP per hour of labor, holding A constant.

According to MIT Economist Robert Solow, in the Absence of a Change