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On the Rate of Interest in a Neo-Austrian Theory of Capital

  • Hiroshi Atsumi
Part of the International Economic Association Series book series (IEA)

Abstract

Given an economy endowed with a set of production processes of the ‘flow-input, flow-output’ type, what determines the rate of interest in competitive equilibrium? When a process has multiple discount rates, what is the real yield? In the von Neumann expanding economy, the maximal growth rate equals the minimal possible interest rate. Is the neo-Austrian model a special case of a general von Neumann approach? It is hoped to show that ‘Austrian triangularity’ is useful to solve these problems.

Keywords

Positive Root Characteristic Polynomial Competitive Equilibrium Market Rate Output Sequence 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

  1. Arrow, K. J. and Levhari, D. (1969) ‘Uniqueness of the Internal Rate of Return with Variable Life of Investment,’ Economic Journal, September.Google Scholar
  2. Burmeister, Edwin (1980) Capital Theory and Dynamics (Cambridge: Cambridge University Press).Google Scholar
  3. Cantor, D. and Lippman, S. (1983) ‘Investment Selection with Imperfect Capital Markets,’ Econometrica, July.Google Scholar
  4. Gale, D. (1965) ‘Optimal Programs for Sequential Investments,’ in M. J. Brennan (ed.) Patterns of Market Behavior (Brown University Press) pp. 17–26.Google Scholar
  5. Hicks, J. R. (1973) Capital and Time: A Neo-Austrian Theory (Oxford: Clarendon Press).Google Scholar
  6. Karmel, P. H. (1959) ‘The Marginal Efficiency of Capital,’ Economic Record, December.Google Scholar
  7. Luenberger, D. G. (1979) Introduction to Dynamic Systems (Chichester and NY: John Wiley).Google Scholar
  8. von Neumann, John (1946) ‘A Model of General Economic Equilibrium,’ Review of Economic Studies, vol. 13.Google Scholar

Copyright information

© International Economic Association 1991

Authors and Affiliations

  • Hiroshi Atsumi
    • 1
  1. 1.University of TsukubaJapan

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