Abstract
In the seventies there have been various attempts to revive Austrian capital theory,1 which may be classified into three groups: (1) HICKS’ [20,22]2 approach has received most attention [8,9,10,12,16,23]. But HICKS is only so far a Neo-Austrian as he takes into consideration the time-consuming nature of capital production [10]. He does, however, not use the Austrian concepts of superiority of roundabout methods, of impatience and of the period of production. (2) To the second group belong TINTNER [33], VON WEIZSÄCKER [34,35,36], REETZ [31] and FEHL [11,12,13] who resume the concept of the period of production. But as proved by the great capital controversy of the thirties [26] this is a dubious tool for the analysis of non-steady state developments (see e.g. [30]). Furthermore WICKSELL [37], ÅKERMAN [1], V.STACKELBERG [32] and VON HAYEK [17] demonstrated the possibility of deriving the conclusions of the Austrian capital theory without this concept. (3) The autors of the third group employ superiority, roundaboutness and time preference to prove that the rate of interest is positive. JAKSCH [24,25] shows in a general linear multisector model that investment implies a positive rate of interest under certain rather strong conditions. Using a weak definition of superiority he is able to show that superiority follows from efficiency and roundaboutness.
First published in Journal of Economic Theory, Vol.17, 1978, pp.38–50.
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Bernholz, P., Faber, M., Reiss, W. (1986). A Neo-Austrian Two-Period Multisector Model of Capital. In: Faber, M. (eds) Studies in Austrian Capital Theory, Investment and Time. Lecture Notes in Economics and Mathematical Systems, vol 277. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-51701-3_6
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