Investment function in Marshall, Fisher and Keynes: a critique of the neoclassical theory of investment in light of the capital theory controversy.
An overwhelming majority of the economics profession is taught that there is an inverse relationship between interest rate and investment expenditures. In the light of the controversies in the theory of capital, we analyse in this article the way in which Marshall, Fisher and Keynes have constructed...
| Publicado en: | European Journal of the History of Economic Thought Vol. 31; no. 3; pp. 437 - 468 |
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| Formato: | Artículo |
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Taylor & Francis Ltd
Jun2024
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| Acceso en línea: | Ver este registro en EBSCOhost |
| Sumario: | An overwhelming majority of the economics profession is taught that there is an inverse relationship between interest rate and investment expenditures. In the light of the controversies in the theory of capital, we analyse in this article the way in which Marshall, Fisher and Keynes have constructed this inverse relationship. All three were aware of the problems associated with this construction and tried—albeit unsuccessfully—different ways to get around them. This implies that within the neoclassical analysis there does not exist a theoretically consistent conceptualisation of an investment demand function inversely responsive to the rate of interest. |
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