Reflecting on the Capital Debates from Modern Perspectives: Interest Rate, Marginal Product of Capital, Equilibrium of Simultaneous Equations and Capital Intensity/Factor Remuneration

Abstract

This paper intends to present a novel perspective on the capital debates. Thomas Piketty, on his book, asserts that the capital debates were virtually meaningless and the neoclassical side won the debates, and this brought several discussions on this point. This paper does not wish to argue that the other side won the debate -- rather, the author believes that the debate is not, in many cases, resolved. Also, many arguments, continuing after the debates in the 50's, 60's and 70's, are fragmented and diverse. The author believes that these arguments are not trivial and in fact very important. With this vision, this paper brings modern updates and perspectives to these arguments.

Keywords: Cambridge Capital Controversy, Marginal Product of Capital, rate of interest, methodology, equilibrium, modern neoclassical theory, heterodox economics

JEL Classification: B22, B41, E11, E12, E13, E22, E25, E43