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ON CAPITAL, TIME AND THE NEOCLASSICAL PARABLES
Author(s) -
BIGMAN DAVID
Publication year - 1979
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1979.tb00535.x
Subject(s) - economics , capital (architecture) , physical capital , index (typography) , capital intensity , neoclassical economics , aggregate (composite) , measure (data warehouse) , microeconomics , mathematical economics , econometrics , human capital , market economy , computer science , history , profit (economics) , materials science , archaeology , database , world wide web , composite material
Many of the paradoxes in capital theory arise from seeking a purely ‘physical’ measure for the aggregate stock of capital. Several recent papers made it clear that heterogeneous capital outfits cannot be measured by a single aggregate index which is independent of the rate of interest. This paper defines and proves the general properties of an index of capital intensity — the degree of ‘roundaboutnes’— which admits both the physical and the time dimensions of capital. A modified form of the neoclassical parables is defined and proved to be universally valid despite reswitching.