2011년 11월 29일 화요일

[자료] Keynsian Teachings: Past and Present


※ Key words: marginal rate of return over cost, in Irving Fisher

※ 발췌: 

(...) Any new investment achieved by an economic operator will determine the salary increase for all employees engaged in business activities (the wage is tied to the marginal cost of labor of the last worker employed). This should result in an increase in annuity rates of return due to increase of aggregate demand. This phenomenon may represent in a particular case a Keynesian condition for achieving investment if it is based on credit because rising demand for loans (at the macro level) or indebtedness (of an economic agent) will strengthen interest rate level. [4] So while the marginal profit of each plant decreases (by market share increasingly lower production level of the individual) investment position remains firm at a constant slope.

The explanation for this phenomenon can be found in Irving Fisher's theory of "Nature of Capital and Income" (1906), "Rate of Interest" (1907) and especially in the important work of his "Theory of Interest" (1930) which show that the investment function is especially a problem of inter-temporal decision. According to his opinion, investment function is as follows:
V2=f(L,I1) where:
V2 representing the investment incomes
L labour force is a constant
I1 achieved investment
As an investment generates money after having been fully achieved, we must take into account two successive periods t1, the establishing term of investment and t2 the period of establishing investments. How labor costs is a constant, it means that incomes depend on the costs of the investment, so the function becomes: V2=f(I1).

If interest rate is d` we can say that it will influence the investment function at the level (1+d`)I1, which possibly implies the amount of interests paid by the company when achieving investments by credits. Investment profit is represented by:
π=f(I1)- (1+d`)I1
Its maximization is reached when:
f `=(1+d`)
What for Fisher ”f `-1” represents the marginal profit that exceeds the cost ("marginal rate of return over cost") in the Keynesian theory, the name of the marginal investment is marginal efficiency of investment. It is obvious (as in the Keynesian theory) the existence of a negative relationship between interest rate and the volume of investment. This theory generates many problems mainly because it does not address situations in which the contractor does not depend on loans to finance investment or the company is to maximize short term profit, lacking a strategic vision. According to Fisher, the capital is intended for all production processes, there is no capital stock or withdrawal under form of profit distribution to shareholders.

This issue was under discussion by Friedrich August von Hayek in his "Pure Theory of Capital" (1941). For him, (...)

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