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The value of a firm’s securities measures the value of the firm’s productive assets. If the assets include only capital goods and not a permanent monopoly franchise, the value of the securities measures the value of the capital. Finally, if the price of the capital can be measured or inferred, the quantity of capital is the value divided by the price. A standard model of adjustment costs enable...

During the past half century, theorizing about economic growth has forced economists to reconsider and revise the capital concept a number of times. This paper explores the analytical relationship between capital accumulation and economic growth, on the one hand, and the natural world, on the other. Section 1 sketches modern growth theory with an emphasis on whether or not the economy is seen a...

This chapter presents a method for modeling the dynamics of changes in human capital as measured by educational attainment. The methodological basis for this approach, known in demography as multi-state methods, was developed in the 1970s at the International Institute for Applied Systems Analysis (IIASA). Originally developed for the simultaneous projections of the populations of subnational r...

Human Capital Accumulation and Labour Market Equilibrium We analyse an equilibrium labour market with on-the-job search and experience effects (where workers learn-by-doing). The analysis yields a standard Mincer wage equation with worker fixed effects and endogenously determined firm fixed effects. It shows that learningby-doing increases equilibrium wage dispersion consistent with the data. E...

Consider a market in which firms accumulate capital according to the Nerlove-Arrow capital accumulation equation. Each player chooses a path of investment and thus an induced path of capital to maximize his total discounted profits which depend on his own capital and the capital stocks of his rivals. Existence is proved for such a nonzero sum, infinite horizon differential game and conditions u...

This paper considers the problem of continuous investment of capital in risky assets over time. Using a Bayesian framework, a model for asset prices is developed where the current price dynamics depend on the history of realized prices. A dynamic Bayesian fractional Kelly strategy, where the investor rebalances the portfolio based on the performance to date, is shown to be optimal assuming that...

A dynamic approach is proposed for the analysis of the Cournot oligopoly game with hyperbolic demand, showing that the adoption of capital accumulation dynamics either à la Solow-Swan or à la Ramsey eliminate the indeterminacy problem characterising the static model when marginal costs are nil. It is proved that the steady state equilibria produced by both models are stable in the saddle point ...

We develop a model of costly technology adoption where the cost is irrecoverable and fixed. Households must decide when to switch from an existing technology to a new, more productive technology. Using a recursive approach, we show that there is a unique threshold level of wealth above which households will adopt the new technology and below which they will not. This threshold is independent of...

This paper proposes a dynamic economic model with physical capital and renewable resources. Different from most of the neoclassical growth models with renewable resources which are based on microeconomic foundation and neglect physical capital accumulation, this study proposes a growth model with dynamics of renewable resources and physical capital accumulation. The model is a synthesis of the ...