Capital Consumption Allowance

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

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

$GDP = NDP + CCA + Indirect Taxes$