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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384 NATURE OF CAPITAL AND INCOME In order to show that this is a correct representation let us first take the case of semi-annual income. RR" represents one year ; Rr represents half a year. Draw the ordinate rh. From h draw vertically upward hq to represent a half-year’s install- ment of income, that is, half of Rs. To avoid complicating the figure, hq is omitted; were it drawn, q would lie on the line 0Q". Then, according to our previous representation, the capital- value will follow the curve Ohg, which forms a “tooth.” The line Og is therefore a line drawn through the top points of two neighboring teeth. Its direction is a first approximation to h P H LF Fic. 43. the direction OQ of the curve for the continuous case. This direction Oq is the diagonal of a parallelogram formed by producing Oh to meet the ordinate from R' in H', producing 0g to Q' and completing the parallelogram. Since H'Q' is twice as far from O as hq (ie. RR"=2 (rR) by hypothesis), it follows, by similar triangles (i.e. Ohg and OH'Q'), that it is also twice as long. But hg represents a half year’s installment of income. Hence H'Q' represents two

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