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> | A '''Capital good''' is a good produced for the production of consumer goods. They are "produced [[factors of production]]." <ref name="Mises_capital">[[Ludwig von Mises]]. [http://mises.org/humanaction/chap15sec2.asp XV. The Market], 2. Capital, [[Human Action]], online version, referenced 2011-02-04.</ref> See [[Capital]]. | ||
== Convertibility and Malinvestment == | == Convertibility and Malinvestment == | ||
"Capital goods," says [[Mises]], "are intermediary steps on the way toward a definite goal." <ref> | "Capital goods," says [[Mises]], "are intermediary steps on the way toward a definite goal." <ref name="Mises_technology">[[Ludwig von Mises]]. [http://mises.org/humanaction/chap18sec5.asp XVIII. Action in the passing of Time], 5. The Convertibility of Capital Goods, [[Human Action]], online version, referenced 2011-02-04.</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," the inconvertibility of a capital good to other lines of business becomes [[malinvestment]], a central tenant of the [[Austrian Business Cycle Theory]].<ref name="Mises_technology">[[Ludwig von Mises]]. [http://mises.org/humanaction/chap18sec5.asp XVIII. Action in the passing of Time], 5. The Convertibility of Capital Goods, [[Human Action]], online version, referenced 2011-02-04.</ref> | ||
Revision as of 05:53, 5 February 2011
A Capital good is a good produced for the production of consumer goods. They are "produced factors of production." [1] See Capital.
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," the inconvertibility of a capital good to other lines of business becomes malinvestment, a central tenant of the Austrian Business Cycle Theory.[2]
References
- ↑ Ludwig von Mises. XV. The Market, 2. Capital, Human Action, online version, referenced 2011-02-04.
- ↑ 2.0 2.1 Ludwig von Mises. XVIII. Action in the passing of Time, 5. The Convertibility of Capital Goods, Human Action, online version, referenced 2011-02-04.
Links
- Capital Goods Wikipedia