Abstract
In this chapter we will try to apply the lessons of the previous chapters, that is we will avoid the concept of a period of production and use von Neumann’s linear activity approach. To close the system we will introduce the demand side into the model. In addition, we will give up Assumption 2.3 (constancy of the subsistence fund and its given stationary time structure), which implies the stationarity of the system. In contrast to the Austrian theory of capital we will, therefore, allow nonstationary solutions. In this and the following chapters, however, we will restrict ourselves to two-sector models: one for the production of a consumption good and one for a capital good. While in Chapters 4 and 5 we will exclude the possibilities of reswitching and capital reversing we will admit them in Chapter 6, in which we will extend the analysis to a multisector model.
This chapter represents Bernholz [1971] viewed from Bernholz, Faber and Reiss [1977, 1978].
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References
In contrast to our approach Bernholz [1971, 1972] does not consider depreciation. In [1971] he uses the capital good also as an input in R3.
The idea of separation was introduced into the literature by Jaksch [1975a]. His definitions, however, differ from ours.
A broader definition of time preference is given by Koopmans [1960,p. 296], Koopmans also onsiders many consumption goods and many periods.
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© 1979 Springer-Verlag Berlin Heidelberg
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Faber, M. (1979). A Two-Period Two-Sector Neo Austrian Model. In: Introduction to Modern Austrian Capital Theory. Lecture Notes in Economics and Mathematical Systems, vol 167. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-48310-3_4
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DOI: https://doi.org/10.1007/978-3-642-48310-3_4
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-09121-9
Online ISBN: 978-3-642-48310-3
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