Capital Good
A Capital good is a good produced for the production of consumer goods. They are "produced factors of production," not raw natural resources or labor.[1] They are also called producers goods.
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