Abstract
In the introduction, we said that a primary target of capital theory is to provide a theory of allocation and distribution of resources and income over time. It should not come as a surprise, then, that the ideas and concepts which lay the foundation of capital theory, and which are employed repeatedly in capital theoretic considerations, essentially correspond to those which are at the core of static allocation theory: prices, markets, efficiency, and the functioning of the invisible hand as an allocation mechanism.
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It should be noted that the idea to distinguish goods according to the time at which they become available dates back to HICKS (1939) and LINDAHL (1939).
It cannot be stressed often enough, that determining which facts are essential is critical to economic consideration. Human beings can think about complex relationships only with difficulty. Therefore, in the interest of clarity, it is in most cases more important to discover the heart of the problem than to closely simulate reality.
In addition to selling emissions, one can also purchase a certificate giving one the right to release a fixed quantity of emissions into the environment (for example, see SIEBERT 1987).
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© 1995 Springer-Verlag Berlin Heidelberg
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Stephan, G. (1995). Basic Concepts. In: Introduction into Capital Theory. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-03081-3_2
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DOI: https://doi.org/10.1007/978-3-662-03081-3_2
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-08216-0
Online ISBN: 978-3-662-03081-3
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