Capital Theory and Dynamics
Capital theory and dynamics are cornerstones for almost every branch of economics. Except in a fictional world where the economies of yesterday, today, and tomorrow are identical, issues of capital formation and dynamic behaviour must always arise. Although the specialist literature is technically demanding, Professor Burmeister shows that its important results can be understood and their economic significance grasped by those who do not possess the "mathematical literacy" required to follow rigorous proofs. Even if future events are known with certainty, they still influence the current economic state. This is the pure role of time. That future events are not known with certainty adds another complexity. This book focuses mainly on the pure role of time.
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alternative asset assume assumption beginning of period capital accumulation capital stocks capital theory capital-labor ratio Chapter commodity competitive equilibrium competitive path constant consumption efficiency convergent manifold curve define denote derived dynamic efficiency dynamic equilibrium dynamic equilibrium prices dynamic paths economic agents equal equation equilibrium prices example exist exogenous expectations factor-price feasible path Figure finite given Golden Rule heterogeneous capital implies initial conditions initial price initial vector interest rate issue machine of type marginal product neo-Austrian neoclassical nomic numeraire one-commodity optimal control optimal path output paradoxical Pareto optimal perfect competition portfolio equilibrium condition primary factor production function profit properties rate of return rational expectations real wage rest point reswitching returns to scale saddlepoint satisfy Section short-run efficient solution stability steady-state equilibrium stochastic sumption suppose technique Theorem theory of value tion two-sector type of capital unique utility function variables vector wage rate zero