Returns to Labor and Capital

Returns to Labor and Capital A final comparison, in Figure 14-7,shows the trends in labor and capital returns in the United States over the last 35 years. We see that labor’s earnings grew sharply but then.stagnated after the early 1970s. The rate of profit on...

Returns on Different Assets

Returns on Different Assets What are the actual real returns on investments in different forms?’ Table 14-2 shows a summary of recent studies on the return to capital in different fields. The rates of return on assets like corporate capital, farmland, and real...

Uncertainty and Expectations

Uncertainty and Expectations The final qualification concerns the risks that exist in investment.decisions. In real life no one has a crystal ball to read the future. All investments, resting as they do on estimates of future earnings, must about future costs and...

Technological Disturbances

Technological Disturbances A deeper complexity involves technological change, Historical studies show that inventions and discoveries raise the return on capital and thereby affect equilibrium interest rates. Indeed, the tendency toward falling interest rates via...

APPLICATIONS OF CLASSICAL CAPITAL THEORY

APPLICATIONS OF CLASSICAL CAPITAL THEORY We have completed our survey of the classical, theory of interest and capital. But capital theory needs some amplifications and qualifications to account for important realistic features ‘of economic...