The Rentier on the Defensive

  • Brendan Brown


A rentier is a passive investor who lives on the earnings from capital. His entire income is derived from assets on which the income yields are outside his control. Examples include equities, bank deposits, and other securities. Real estate is also a favourite investment with rentiers, although its income derived depends to some extent on the efficiency of estate management. The straight rentier, as distinct from the trader or financier, does not attempt to make speculative profit from trading opportunities in the market.


Real Interest Rate Investment Opportunity Real Rate Income Redistribution Real Money Balance 
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Notes and References

  1. 3.
    See J. M. Keynes, The General Theory (Macmillan, 1965 edition) p. 221.Google Scholar
  2. 4.
    See I. Fisher, The Theory of Interest (Macmillan, 1930) p. 191.Google Scholar
  3. 6.
    For an account of this problem, see, for example, J. Hirshleifer, Investment, Interest and Capital (Prentice-Hall, 1970 ) pp. 82–5.Google Scholar
  4. 7.
    For elaboration, see Part 2, pp. 131–2, of present volume. For a further treatment of the concept, see S. M. Schaeffer, ‘The Problem with Redemption Yields’, in J. Lorie, and R. Brealey Modern Developments in Investment Management (Dryden Press, 1978 ) pp. 702–26.Google Scholar
  5. 8.
    See K. J. Arrow, Essays in the Theory of Risk-bearing (North Holland, 1974) pp. 99–105. Low risk is defined here in terms of the asset’s contribution to the volatility of the portfolio’s returns. The proposition here does not conflict with that in the next chapter, where small savers are found to place a larger share of their portfolio in hedge assets than do large savers.Google Scholar
  6. 9.
    See Bresciani-Turroni, The Economics of Inflation (Kelley, 1968) pp. 253–85.Google Scholar

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© Brendan Brown 1982

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  • Brendan Brown

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