Capital Gains in Economic Theory and National Accounting

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Capital Gains in Economic Theory and National Accounting: Alte Version

Author:: Steindl, Josef

Scope:: Typoskript, 15 Blätter, mit Anstreichungen und Anmerkungen

Year of publication:: ohne Datum

Language:: English

Description:: The national accounts do not know capital gains as they do not deal with assets and consider only the relations of flows in one year. Steindl states that modern economics manages practically to ignore the theoretical relevance of capital gains. Steindl argues that a rise in land or share values creates savings just like real investment and that the exclusion of capital gains from national accounts has led to glaring misinterpretations of the data (distortion of the savings rate). He suggests to introduce separate accounts for capital gains, consumer's credit and investment. Furthermore he explains the macroeconomic implications of creating capital gains.

Note:: Eine längere Version des vorliegenden Textes wurde post mortem (1998) publiziert. Die in diesem Typoskript vorhandenen Texteile sind im Wesentlichen identisch mit dem publizierten Text (es fehlen Kapitel 9 und Teile von Kapitel 10).

Related work:: Steindl, Josef: Capital Gains in Economic Theory and National Accounting. In: Banca Nazionale del Lavoro Quarterly Review, Vol. 51, Issue 207, December 1998, S. 435-449

Topic:: Economic history,economic theory,current developments

JEL Classification:: E22 [Investment, Capital, Intangible Capital, Capacity] E01 [Measurement and Data on National Income and Product Accounts and Wealth, Environmental Accounts]

Shelfmark:: S/M.22.6

Access:: Free access

11 interest payments not fed from additional output due to the credit is also found in different cases: Consumer's credit and government borrowing to finance armaments or social expenditure wwhich as a direct effect increase effective demand. The shift in distribution owing to the interest payments may and most probably will,however, influence effective demand unfavorably if, as is likely, the interest income is less readily spent than most other incomes. In all cases the shift to interest receivers can be avoided if the total income of society increases correspondingly so that relatively speaking the position of rentiers is unchanged. The aftereffects of a consumers'credit or a budget deficit will become more inconvenient if the (net) borrowing is repeated, with the object of holding effective demand on the same level. The income is then shifted more and more to the rentiers.Since the interest has to be paid out of the new credits these have either to be increased or the effective demand created will decrease. Similar effects will obtain in the case of continuing increase in land or other asset prices. If, in order to escape from these troubles, measures are taken to reduce the debt then this will necessarily mean a corresponding more or less drastic restriction of effective demand. The experience of this is nowadays familiar to everybody in view of the frequent instances of restrictive budget policies. The dilemma is, however, the same for households and corporations. JA LINKS TO THE THEORY OF INFLATION / _ ( We have drawn a parallel between the concepts of Investment and Saving on the one hand and "Inflationary Spending" on Assets and Realised Capital Gains on the other. Actually this parallel is really hardly new or strange to the Keynesian tradition if we

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