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Squaring the investment cycle

By Egmont Kakarot-Handtke

Abstract

The present paper replaces the standard behavioral axioms by structural axioms and applies these to the analysis of the accumulation and decumulation of capital. This yields a coherent view of the interrelations of real and nominal saving–investment, of profit–loss, of money–credit, and of internal–external financing. The main result is that asymmetric growth is indispensable for the viability of the market system.

Topics: E22 - Capital; Investment; Capacity, E23 - Production, E21 - Consumption; Saving; Wealth, E10 - General, E40 - General
Year: 2011
DOI identifier: 10.2139/ssrn.1911796
OAI identifier: oai:mpra.ub.uni-muenchen.de:32895

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