The nature of capital and income

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Monograph

Identifikator:: 102659555X

URN:: urn:nbn:de:zbw-retromon-82920

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The nature of capital and income

Place of publication:: New York

Publisher:: The Macmillan Company

Year of publication:: 1923

Scope:: XXI, 427 Seiten

Digitisation:: 2019

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Part IV. Summaries

Collection:: Economics Books

CHAPTER XVII SUMMARY OF PART III (CHAPTERS XI-XVI) REPRESENTED BY DIAGRAMS §1 We have finished our study of the relations between capital-value and income-value and may .now pause to summarize them briefly. At the beginning of Part III it was stated that the income from capital wealth consists of whatever service it performs for man; that capital and income may each be measured either in specific quantities of their respective units, or in value; and that consequently there are four ratios between income and capital; namely, (1) the physical productivity of capital, (2) the value pro- ductivity, (3) the physical return, and (4) the value- return. Our special theme has been the value-return, — the relation between income-value and capital-value. We saw that the value of capital wealth is the discounted value of its expected income. The relation between the value of the income and the value of the capital was indi- cated by diagrams. Income Was represented by a series of vertical lines as in Figure 13 (a, a’, 0 ' a"), the hori- zontal distances between them representing intervals of time. It was then found possible to represent the capital- value of this income in anticipation, on the assumption that the income could be relied upon with certainty. This representation gave the capital curve, — a broken or toothed curve AB. In this curve, each vertical drop 1s equal to the corresponding income item shown below it, and the intervening points are connected by discount 303

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