Showing papers on "Individual capital published in 1978"

The Human Capital Revolution in Economic Development: Its Current History and Status

Abstract: presidential address, entitled \"Investment in Human Capital,\" he ushered in what his colleague Mary Jean Bowman later was to term the \"human investment revolution in economic thought.\"l What Schultz and his contemporaries purported to have achieved was the incorporation of educational decisions by individuals and societies into the core of microeconomic theory. The economics department of the University of Chicago, which Schultz had chaired since the early 1940s, had long been regarded as the major proponent of neoclassical microeconomic theory.2 To an appreciable extent human capital theory was, in Schultz's own words, designed to extend microeconomic theory by solving some important paradoxes or \"puzzles\" which hitherto had only been explained on an ad hoc basis.

The nature of the conflict between transactors' expectations of capital gain

Abstract: A WIDELY ACCEPTED PROPOSITION in capital markets theory is that trades in a security result from transactors holding conflicting expectations for its return potential [11, 12]. No one has attempted to test this theory by surveying buyers' and sellers' return expectations. The present paper examines this unexplored area by reporting on an empirical investigation of the homogeneity of transactors' expectations for the future equilibrium prices of selected common stocks. Keenan [7], commenting upon the empirical methods of studying valuation models, has concluded that, "If measure variables of investor expectations are to be developed we may have to engage in survey sampling of transactors." To advance the development and measurement of the cost of equity capital, Friend [5] has observed that, "To achieve any real progress in this area in the near-term future, it seems to be necessary to survey a comprehensive sample of investors to determine the anticipated rates of return on individual stocks which they buy, sell or otherwise follow." More recently, Lease, Lewellen and Schlarbaum [8]; Cohn, Lewellen, Lease and Schlarbaum [4]; Baker and Haslem [2, 3]; and Gooding [6] have reported on surveys of individual investors' attitudes, attributes, portfolios, decision variables, and risk and return perceptions. The study reported here adds buyers' and sellers' probabilistic price expectations for three widely-held and actively-traded common stocks to this growing base of survey data. Observed differences in the risk and return characteristics of these measured expectations were generally consistent with the proposition that buyers of a stock are more optimistic about the nature of its future price behavior than sellers.

Social Roles and Economic Firms: The Sociology of Human Capital

Abstract: It is my belief that economic analysis is essential in understanding much of the behavior traditionally studied by sociologists, anthropologists and other social scientists. This is a true example of economic imperialism! [Gary Becker, Economic Theory, p. 2] Human capital is strictly an economic concept. Although it pertaints to particular attributes of man, it is not intended to serve those who are engaged in analyzing psychological, social, or cultural behavior. [Theodore Schultz, Human Resources, p. 5]

Realism and relevance in the cost of money capital

Abstract: THE contemporary literature on micro-financial theory has failed to resolve an important question confronting the imperfectly competitive firm: What, in actual fact, is to be regarded as the firm's cost of money capital for investment decision-making purposes? That this question remains unanswered is due to the fact that the financial theory of the firm has become heavily committed to the assumptions of an equilibrium theoretic approach to its problems in general, and to the implications that this has in particular for equilibrium conditions in the money capital market. The same theoretic mould as Robert Clower brought into focus in his critique of 'the Keynesian counter-revolution'"-the assumption of Walrasian equilibrating processes and the absence of false trading-has led financial theory to a preoccupation with the specification of equilibrium conditions and to the neglect of some critically important phenomena. The assumption of infinite price adjustment velocities, and the failure to acknowledge that in both the real and the financial markets of the economy transactions are consummated at non-equilibrium or 'false' prices, have led to a disregard of the fact that the important and structural decisions in the firm, decisions regarding capital investment and financing for example, are made in demonstrably disequilibrium conditions and not in equilibrium situations at all. The question that still requires clarification, therefore, is that of the appropriate specification of the cost of money capital to a firm whose actual posture is, at the point in time when decisions have to be made, other than what might be describable by equilibrium or optimally structured relations. In the argument that follows we shall not rehearse those parts of modern financial theory which have established what has become known as the Walrasian capital asset-pricing model or the general equilibrium theory of financial asset-pricing.2 But we can note that in that analysis the

Education and the Transfer of Inequality from Generation to Generation.

Abstract: Human capital economics provides a theoretical framework for analyzing the decisions of individuals to incur costs for education. The model predicts that an individual will choose to add to his or her stock of human capital—i.e., to invest—so long as the discounted value of the returns that accrue over time exceeds or at least equals the value of the present consumption foregone.1 While there are many ways to raise productive capacity—such as migrating (from an area with a smaller to one with a larger stock of complementary capital, physical or human)2 or marrying (which, despite the tax laws, can yield similar benefits via specialization and economies of scale)3 — education is probably the clearest example of human capital investment, and one of the most significant in terms of total resources expended.4 Indeed, the enhancement of an individual's capacity to \"do things\" (not just market-related activities, but all things in life) is a reasonably accurate if not sufficiently specific expression of what economists and others mean when they speak of \"education.\"5

Individual Consumption in Capitalism. An Exercise in the Logic of Capital

Abstract: This is a systematic analysis of the apparent contradictions of private consumption - growing discrepancy between productive potential and actual needs, the degenerating quality of consumption and so on - within the frame of Marx's critique of political economy. Similar analyses of other material and social areas of everyday life such as ideology, technolo gy, forms of consciousness, etc. are referred to as a 'subsumptive ap proach'.By this is meant a theoretical standpoint that sees the capitalist social form as the subsumptive agent that renders the fundamental social deter minants to every sphere of social life. An exercise is undertaken in order - to see what the formal social determinants of consumption are in the capitalist mode of production. For this reason the determinants of con sumption are analysed in the reproductive circuit of individual capital. The- implications and limitations of this analysis are discussed with respect to problems relating to the theoretical stipulations of the subsumpti...

Capital Gains and the Economic Theory of Corporate Finance

Abstract: The dependence of one agent’s actions upon those of another constitutes a fundamental departure point for much of received economic theory. Apart from a deterministic setting, the presence of uncertainty implies a dependence on the probable actions of other agents; that is, the ultimate behavior of an individual is to a certain extent a consequence of his beliefs concerning the behavior of other agents. While the difficulty associated with formulating even crude conjectures of this nature is overwhelming, actual informational demands are even greater as from the dependence of agent A’s actions on his beliefs concerning agent B’s actions, it follows directly that agent B’s actions are dependent on his beliefs concerning agent A’s beliefs relative to his (agent B’s) action as well, as infinitum.