We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
THE AVERAGE PERIOD OF PRODUCTION: THE HISTORY AND REHABILITATION OF AN IDEA.
- Authors
Lewin, Peter; Cachanosky, Nicolás
- Abstract
Austrian capital theory tried to capture the intuitive and basically undeniable importance that time plays in economic life, but arguably was diverted down a blind alley with Eugen von Böhm-Bawerk’s average period of production, a purely physical measure of ‘roundaboutness’—the length of the production process. For the general case, such a measure is a chimera. But the intuition is strong, and the idea survived and reappeared at various points in the history of capital theory. Almost unknown to economists, an alternative value measure of roundaboutness has existed at least since John Hicks’s formulation of his average period (AP) in 1939, which, coincidentally, was exactly the same measure discovered by the financial actuary Frederick Macaulay in 1938, called by him “Duration” (D). Macaulay’s D, more richly interpreted as Hicks’s AP, is a measure that more appropriately captures what it was that the Austrians struggled to express over many years in their capital theory and in their analysis of the business cycle.
- Subjects
AUSTRIA; CAPITAL; BUSINESS cycle management; MACAULAY, Frederick; MENGER, Carl, 1840-1921
- Publication
Journal of the History of Economic Thought (Cambridge University Press), 2018, Vol 40, Issue 1, p81
- ISSN
1053-8372
- Publication type
Article
- DOI
10.1017/S105383721700013X