Capital, Accumulation, and Money

by Taylor, Lester D.

• ISBN13: 9780792377818
• ISBN10: 0792377818
• Format: Hardcover
• Copyright: 2000-03-01
• Publisher: Springer Verlag

Summary

Capital, Accumulation, and Money: An Integration of Capital, Growth, and Monetary Theory is a book about capital. A root concept of capital is developed which allows for most existing concepts of capital to be unified and related to one another in consistent fashion. Such a root concept of capital offers a framework for integrating monetary and capital theory, and for analyzing the functioning of an economy, whether that economy is in a steady state of subsistence or in a process of sustainable growth. Specifically, it is shown that a conservation principle emerges that both implies and imposes a variety of constraints on the macro behavior of an economy, constraints which make for straightforward understanding and analysis of such concepts as the real stock of money, real-balance effects, and the general price level. New and illuminating insights are also provided into aggregate supply and demand, natural and money rates of interest, the relationship between real and monetary economies, and economic growth and development.

Table of Contents

List of Figures	xi
Preface	xiii
Prologue: Tales of Myros: Emergence of a Primitive Economy from an Economic State of Nature	1	(8)
Premises and an Overview	9	(6)
Myros and Other Concepts and Definitions	15	(10)
Myros	16	(4)
Myros Recovery Charges	20	(1)
Human and Nonhuman Capital	21	(1)
A Glossary of Concepts and Definitions	22	(3)
The Macroeconomic Framework	25	(18)
An Overview	25	(6)
Constraints (or `Conservation Laws') Imposed by the Pool of Fluid Capital	31	(3)
The Determination of Asset Values	34	(4)
Aggregate Demand and Supply	38	(2)
Macroeconomic Equilibrium	40	(3)
Interest and Money	43	(22)
Factors Making for the Existence of Interest	44	(2)
Determination of Money and Natural Rates of Interest	46	(9)
A World with Fiat Money	55	(2)
The Concept of Velocity and the Demand for Money	57	(2)
Power of the Monetary Authority	59	(2)
The Commercial Paper Market	61	(1)
Some Notes on Monetary Policy	62	(3)
Production and Investment	65	(20)
Capital and Production	66	(3)
From Production to Investment	69	(12)
Roles of the Money and Natural Rates of Interest	81	(1)
Financing of Investment: An Illustration	81	(4)
The General Price Level and Inflation	85	(16)
Defining the General Price Level	85	(9)
Problems Arising from Excessive Monetization of Assets	94	(3)
The General Price Level and the Natural Rate of Interest	97	(1)
Equilibrium in the Natural and Money Rates of Interest	98	(3)
Capital Values, Wealth, and Related Topics	101	(28)
The Aggregate Wealth of an Economy	101	(1)
Money As Wealth and Real-Balance Effects	102	(1)
Some Implications of Old Masters As a Store of Value	103	(2)
Taxation of Capital Gains	105	(3)
Forced Saving and Investment	108	(2)
More on Excess Monetization of Assets	110	(1)
Loan Defaults and the Stock of Money	111	(1)
Crowding-Out	112	(4)
Burden of the National Debt	116	(1)
Ricardian Equivalence	117	(1)
Commodity Money	118	(1)
Fluid Capital and the Gold Standard	119	(4)
Demonetization and Monetization of Economies	123	(3)
Economic Growth with Deflation: 1873--1896 in the U.S.	126	(3)
Macroeconomic Equilibrium and Employment	129	(10)
Capital Theory in Perspective	139	(18)
Schumpeter	139	(3)
Keynes	142	(2)
Irving Fisher	144	(1)
Bohm-Bawerk	145	(1)
Jevons and Wicksell	146	(1)
Capital As Embedded (or Stored) Labor	147	(2)
Capital Theory As the Economics of Time	149	(2)
Capital Accounting	151	(3)
Capital and Nonrenewable Natural Resources	154	(3)
Opportunity and Sunk Costs	157	(8)
Opportunity Costs	157	(3)
The Measurement of Unit Incremental Cost	160	(1)
Sunk Costs	161	(4)
Trade, Transfers, and Monetary Overhags	165	(20)
Trade and Exchange Rates	165	(2)
Monetary Overhangs and Capital Levies	167	(3)
Wealth Transfers and Monetary Overhangs: A Stylized Analysis	170	(8)
Policies for Eliminating a Monetary Overhang: The Case of German Reunification	178	(5)
The German Reunification: An Assessment	183	(2)
Questions Related to Consumption and Saving	185	(10)
The Macroeconomics of Retirement Saving and Consumption	185	(2)
Questions Related to Position Goods	187	(3)
Questions Related to Engel Curves and Income Elasticities	190	(2)
The Hierarchical Nature of the Pool of Fluid Capital	192	(3)
Questions Related to Economic Growth	195	(10)
The General Mechanics of Economic Growth	195	(2)
Some Basic Truths Concerning Economic Development	197	(1)
Keynes and Economic Bliss	198	(1)
The Endogenous Nature of Economic Growth	199	(1)
The Role of Technological Change	200	(1)
Investment in Research and Development	200	(1)
Economic Growth in Reverse: large-Scale Disasters in Low-Income Economies	201	(3)
Economic Growth and Different Stages of Development	204	(1)
Themes and Counter Themes: Fluid Capital in Retrospect	205	(8)
APPENDIX I: On the Role of Theory in Economic Analysis	213	(10)
I. Introduction	213	(1)
II. Economic Theory in Action: The Theory of Consumer Choice	214	(3)
III. Modeling Real-Time Dynamics	217	(3)
IV. Conclusions	220	(3)
APPENDIX II: Investment Functions Dont Necessarily Slope Downward	223	(6)
I. Introduction	223	(1)
II. The Relationship Between Investment and the Rates of Interest	224	(3)
III. Further Discussion and Conclusions	227	(2)
APPENDIX III: Productivity Implications of the Oil Price Increases of the 1970s	229	(10)
I. Introduction	229	(1)
II. Instantaneous Effects of the Oil Price Increases	230	(2)
III. Some Real-Time Dynamics	232	(1)
IV. Implications for Subsequent Productivity Growth	233	(3)
V. Financial Recycling	236	(1)
VI. Conclusion	237	(2)
APPENDIX IV: Additional Tales Involving a Primitive Economy	239	(10)
Bibliography	249	(10)
Index	259