Abstract
How capital gains and losses are distinct from income raises subtle and unresolved issues. Whereas national accountants measure income as the sum of the value of production and net current transfers, thus excluding stock revaluations that change the level of wealth, Hicks’s definition implies that expected stock revaluations count as income. Such revaluations due to inflation benefit net debtors but mean losses for households. Irreversible environmental damage and depletion of non-renewable resources are often treated as capital loss, but great uncertainty affects the estimation of consequences, rendering the emergence of an objective methodology for economic decisions is particularly difficult.
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Malinvaud, E. (2018). Capital Gains and Losses. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_615
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DOI: https://doi.org/10.1057/978-1-349-95189-5_615
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