Production and Capital, Volume 5

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Harvard University Press, 1985 - Business & Economics - 481 pages
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Unlike the papers of some other great economists, those of Kenneth Arrow are being read and studied today with even greater care and attention than when they first appeared in the journals. The publication of his collected papers will therefore be welcomed by economists and other social scientists and in particular by graduate students, who can draw from them the deep knowledge and the discernment in selection of scientific problems that only a master can offer. The author has added headnotes to certain well-known papers, describing how he came to write them.

The study of production is central to economic theory, and capital and its accumulation are two of the most interesting aspects of the modern production process. Capital may take the form of inventories of inputs, inventories of outputs, or machines and other fixed goods. The essential and unique aspect of all types of capital is that it must be accumulated as the result of prior stages of the production process. This gives the dynamic theory of production a recursive structure that can be exploited by economic analysis. The optimization of production under recursive conditions lends itself to general mathematical methods of dynamic programming and optimal control theory. This is the main theme of the essays included in this fifth volume of Kenneth Arrow's Collected Papers.

 

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Contents

On the Use of Winds in Flight Planning
1
Optimal Inventory Policy
25
CapitalLabor Substitution and Economic Efficiency
50
Economic Welfare and the Allocation of Resources for Invention
104
Optimal Capital Adjustment
120
Optimal Advertising Policy under Dynamic Conditions
140
The Economic Implications of Learning by Doing 757
157
Optimal Capital Policy the Cost of Capital and Myopic Decision Rules
181
Applications of Control Theory to Economic Growth
267
Classificatory Notes on the Production and Transmission of Technological Knowledge
297
Optimal Consumer Allocation over an Infinite Horizon
307
Optimal Public Investment Policy and Controllability with Fixed Private Savings Ratio
332
Uniqueness of the Internal Rate of Return with Vanable Life of Investment
373
The Social Discount Rate
382
Optimal Growth with Irreversible Investment in a Ramsey Model
401
Uncertainty and the Evaluation of Public Investment Decisions
418

Knowledge Productivity and Practice
191
Critena for Social Investment
200
Discounting and Public Investment Criteria 275
215
Reply
236
Optimal Capital Policy with Irreversible Investment
241
Reply
440
A Production Function for the Repairman Problem
443
The Measurement of Real Value Added
456
Index
477
Copyright

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About the author (1985)

A past president of the American Economic Association, Kenneth J. Arrow was awarded the Nobel Memorial Prize in Economic Science in 1972.