Economics Dictionary of ArgumentsHome
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| Capital stock: Capital stock in economics refers to the total value of physical, man-made assets used in production, such as machinery, buildings, and equipment. It represents accumulated investment and is a key factor in economic growth, influencing productivity and output levels. Capital stock excludes financial assets and focuses on tangible resources that enhance production capacity. See also Capital, Capital structure._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Austrian School on Capital Stock - Dictionary of Arguments
Coyne I 17 Capital stock/Austrian School/Coyne/Boettke: The concept of the capital structure stands in contrast to the idea of a "capital stock," which refers to an aggregate measure of all capital at a point in time. >Capital structure/Lachmann. Obtaining a single measure of the capital stock requires that capital be added together using a common denominator such as money. Cf. >Capital/Joan Robinson. LachmannVsRobinson: Ludwig Lachmann, however, argued that this approach does not make sense because it assumes that prices are in equilibrium. >Equilibrium. Given subjective expectations and valuations, whether someone values a good as a capital good is not objectively observable. Moreover, human expectations will often be incorrect because of the three factors discussed above. See >Capital structure/Lachmann. Coyne I 18 The notion of a capital stock only makes sense in a world where equilibrium has been achieved, meaning that all plans and expectations align perfectly. But, in a disequilibrium world characterized by constant error and change, the idea of a capital stock is not useful. It is for this reason that Lachmann, and other Austrian economists, focus instead on the capital structure. In disequilibrium, what matters is how heterogeneous and multi-specific capital goods fit together in production plans and how capital substitution occurs in the face of error and changing conditions._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Austrian School Coyne I Christopher J. Coyne Peter J. Boettke The Essential Austrian Economics Vancouver 2020 |
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