The Discounted Marginal Value Product – Marginal Value Product Controversy: A Note
9 Pages Posted: 8 Jul 2011
Date Written: July 6, 2011
We are all familiar with the process of discounting the future. From the earliest courses in economics we are taught that money receivable right now is not the equivalent of money receivable one year hence; that money receivable one year from now is not equivalent to money which will fall in to our clutches after a period of two years. And not just because inflation may erode part of the value, or because of the risk of never seeing the money. Even in a perfectly certain world of no inflation, where all accounts receivable were fully guaranteed, we would still value money more, the sooner we were to receive it.
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