The Legacy of Knut Wicksell to Capital Theory |
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Authors: | Edmond Malinvaud |
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Affiliation: | 42 avenue de Saxe, F‐75007 Paris, France |
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Abstract: | Wicksell's contributions to capital theory focused on stationary states in four distinct models intended to account for the time dimension of production in market economies. We now have a better understanding of the true challenges because of two developments: a full theory of intertemporal general equilibria and a methodology for comparative analysis as explained by Hicks. In Wicksell's equilibria, the real interest rate turns out to be equal to the marginal productivity of the volume of social capital, a concept that Wicksell could not master and hence avoided. Challenges remain, particularly regarding the best way to account for complementarities and substitutions over time. |
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Keywords: | Capital theory comparative analysis Wicksell |
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