Squaring the Investment Cycle

27 Pages Posted: 18 Aug 2011 Last revised: 8 Jun 2014

See all articles by Egmont Kakarot-Handtke

Egmont Kakarot-Handtke

University of Stuttgart - Institute of Economics and Law

Date Written: August 18, 2011


The present paper replaces the standard behavioral axioms by structural axioms and applies these to the analysis of the accumulation and decumulation of capital. This yields a coherent view of the interrelations of real and nominal saving–investment, of profit–loss, of money–credit, and of internal–external financing. The main result is that asymmetric growth is indispensable for the viability of the market system. An equilibrium of saving and investment would be rather disadvantageous for the business sector.

Keywords: new framework of concepts, structure-centric, axiom set, symmetric investment cycle, asymmetric investment cycle, flux-reflux, real rate of interest, nominal rate of profit, monetary profit, nonmonetary profit, roundaboutness

JEL Classification: E10, E21, E22, E23, E40

Suggested Citation

Kakarot-Handtke, Egmont, Squaring the Investment Cycle (August 18, 2011). Available at SSRN: https://ssrn.com/abstract=1911796 or http://dx.doi.org/10.2139/ssrn.1911796

Egmont Kakarot-Handtke (Contact Author)

University of Stuttgart - Institute of Economics and Law ( email )

Keplerstrasse 17

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