Capital goods: Difference between revisions
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A '''Capital good''' is a good produced for the production of consumer goods. They are "produced [[factors of production]]." <ref>''Human Action: Scholar's Edition'' p.263. [http://www.mises.org/resources/3250 Human Action].</ref> | A '''Capital good''' is a good produced for the production of consumer goods. They are "produced [[factors of production]]." <ref>''Human Action: Scholar's Edition'' p.263. [http://www.mises.org/resources/3250 Human Action].</ref> | ||
== Convertibility and Malinvestment == | |||
"Capital goods," says [[Mises]], "are intermediary steps on the way toward a definite goal." <ref>''Human Action: Scholar's Edition'' p.499. [http://www.mises.org/resources/3250 Human Action].</ref> Having a definite purpose, a capital good is not always readily transferable into other means of production. Since the value of a capital good is exclusively "from the point of view of the anticipated future state of the market,"<ref>''Human Action: Scholar's Edition'' p.502. [http://www.mises.org/resources/3250 Human Action].</ref> the inconvertibility of a capital good to other lines of business becomes [[malinvestment]], a central tenant of the [[Austrian Business Cycle Theory]]. | |||
Revision as of 22:54, 4 February 2011
A Capital good is a good produced for the production of consumer goods. They are "produced factors of production." [1]
Convertibility and Malinvestment
"Capital goods," says Mises, "are intermediary steps on the way toward a definite goal." [2] Having a definite purpose, a capital good is not always readily transferable into other means of production. Since the value of a capital good is exclusively "from the point of view of the anticipated future state of the market,"[3] the inconvertibility of a capital good to other lines of business becomes malinvestment, a central tenant of the Austrian Business Cycle Theory.
References
- ↑ Human Action: Scholar's Edition p.263. Human Action.
- ↑ Human Action: Scholar's Edition p.499. Human Action.
- ↑ Human Action: Scholar's Edition p.502. Human Action.
Links
- Capital Goods Wikipedia