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For example, over time there are likely to be improvements in the quality of capital goods.
It has long been recognised that in state courts, the quality of capital defence lawyers is sometimes appalling.
The quality of capital investment has fallen, with almost half now spent by households, mainly on construction.
"The quality of capital has improved dramatically," Silvio Peruzzo, euro zone economist at the Royal Bank of Scotland, said.
The quality of capital is substantially improved, with firms holding higher amounts of the types of capital best able to absorb losses.
Even the central bank worries about the quality of capital flows.Some of this year's inflows may reflect a statistical quirk surrounding the sale of a stake in an Indian bank by Citigroup.
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"The core issue there is the quality and quantity of capital and setting standards for that, and also an appropriate cap on leverage," said Mr. Flaherty.
To make it operational, many new associated and more specific concepts have been proposed such as natural and social capital, conservation economy and quality of life capital.
However, under Basel I, banks could issue preferred shares and decrease the weight of common equity within the total regulatory capital that increases the quality of their capital.
Because of the lower relative cost of debt-like instruments compared to capital instruments, banks preferred to issue hybrid capital to offset the increase in risk-weighted assets during the expansion period, which deteriorated the quality of regulatory capital.
While those other explanations cannot be excluded completely, we conclude that "the relationship between the returns to immigrant human capital and country of birth income that we observe is most consistent with a model where the quality of human capital in a country is positively related with that country's level of income".
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