Abstract: In the aftermath of the Cambridge debates on capital, many neoclassical theorists (Malinvaud, 1971; Blaug, 1974; Bliss, 1975; and Burmeister, 1980) have advocated a disaggregated, general equilibrium (hereafter GE) approach to capital theory in order to avoid the Cambridge paradoxes. However, there are still several unresolved problems with the way these models handle capital theory. While the GE model is sufficiently general to cover a range of purely theoretical problems, this generality is achieved at the expense of abstracting from such proglems as uncertainty, plan coordination and discoordination, expectations, learning (or failing to lear), and monetary factors-all topics of especial importance for capital and investment theory. In addition, intertemporal microeconomic GE models suffer from an inability to obtain a single rate of return or even a meaningful structure of rates of return other than a mere listing of the intertemporal price ratios of physically identical commodities across different time periods.1 On some commodities there may be no own rate of return at all or even a negative rate of return. All of these problems point toward the focus of our argument -that there is little or no room in the GE model for capital theory. The following investigation argues that those factors that would differentiate prices across time from prices across space are
Publication Year: 2016
Publication Date: 2016-01-01
Language: en
Type: article
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