Abstract
The development of the previous chapter takes investment as given, i.e. autonomous investment denoted by A. The effect of a given rate of investment was examined by means of the multiplier. This is one-sided and it ignores the reciprocal relations between investment and output. Investment does influence output, but output affects investment. More strictly, it is a change in output over time, or from one period to another, which influences net investment as the addition to capital stock in a period. Investment which arises because of a change in output is called induced investment, denoted by I. A number of preliminary points must be made ; the relation of output to induced investment is both complicated and indirect, and the distinction between induced and autonomous investment is never clear-cut.
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© 1959 R. G. D. Allen
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Allen, R.G.D. (1959). The Acceleration Principle. In: Mathematical Economics. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-81547-0_3
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