The following lecture notes were written shortly after I gave a course on capital theory in the winter-semester 1970/71 at the University of Heidelberg. While the general line of the argument is similar to the one in the course, I have modified and added a large number of specific points in the process of writing the English version.
KeywordsEquilibrium Theory Future Consumption Walrasian Equilibrium General Equilibrium Theory Aggregate Production Function
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- Classic sources of the concepts mentioned in the preface are: Marx,op.cit., volume I; B5hm-Bawerk, op.cit.j J.B.Clark, The Distribution of Wealth, New York 1899, chapter XX; A.Marshall, Principles of economics, London 1890. For Solow’s work on the private and social rate of return see: R.M.Solow, Capital Theory and the Rate of Return, Amsterdam 1963 One of the most recent controversies is between Pasinetti and Solow in the Economic Journal (L.L.Pasinetti, Switches of Technique and the Rate of Return in Capital Theory, E.J. September 1969, R.M.Solow, On the Rate of Return: Reply to Pasinetti, E. J., June 1970, and L.L. Pasinetti, Again on Capital Theory and Solow’s “Rate of Return”, E.J. June 1970). I should also like to refer the reader to a controversy between Riese and myself in Kyklos, where I emphasize that the equality of social and private rate of return on investment is just a special case of the equality of price ratios and marginal rates of transforma- tion in general equilibrium models (H.Riese, Das Ende einer Wachstumstheorie, Kyklos 1970, Fase.C.C.von Weizsäcker, Ende einer Wachstumstheorie?, Kyklos 1971, Fasc.lj; H.Riese, Das Finale vom Ende einer Wachstumstheorie, Kyklos 1971, Fasc.l). Hicks1 theory is in J.R.Hicks, A Neo Austrian Growth Theory, Economic Journal, June 1970.Google Scholar