Capital goods
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,"[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