The meaning of Ic(h)or

During a dinner conversation with friends on Thursday night, the subject of ichor came up. (Don’t ask – the gentlemen who mentioned it writes crossword puzzles for a living.) Not surprisingly, none of us had the slightest idea what he was talking about. It turns out that ichor is essentially the blood of the Gods.

From Wikipedia:

In Greek mythology, ichor (Greek ἰχώρ) was a mineral present in the blood of the gods that kept them immortal. It was sometimes said to have been present in ambrosia or nectar. When a god was injured and bled, the ichor made their blood poisonous to mortals.

But the word did ring vaguely familiar. After a few seconds, I remembered having heard it mentioned once in an international trade theory class. Of course, the professor wasn’t talking about Greek Mythology. Not being able to recall what the acronym stood for, I sought to commit it to memory. Here’s what I found.

According to Deardorff’s Glossary of International Economics

The amount of additional capital that a developing country requires to increase its output by one unit; thus the reciprocal of the marginal product of capital. Used as an (inverse) indicator of how efficiently a country is using the scarce capital it acquires.

Sound complicated? Actually, it’s really not all that difficult. It’s basically a measure of investment efficiency. Chi Hung Kwan explains in an essay written for the Japanese Research Institute of Economy, Trade and Industry (REITI):

When considering investment efficiency in macroeconomic terms, the “incremental capital – output ratio (ICOR)” serves as a guide. ICOR is obtained by dividing the ratio of investment to GDP with real economic growth, and the smaller it is, the more efficient the investment.

Here are some comparative figures from Mr. Kwan’s essay:

So, there you have it. The hematological and economic significance of ic(h)or. Two of the most useful words in the English (and Greek) language(s).