Capital Gains in Economic Theory and National Accounting

Steindl, Josef

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Dokumentenart:: Werk

Sammlung:: Nachlass Josef Steindl

Titel:: Capital Gains in Economic Theory and National Accounting

Autor/in:: Steindl, Josef

Art/Umfang:: Typoskript, 13 Blätter, mit handschriftlicher Ergänzung auf Seite 1 sowie handschriftlicher Paginierung (beides nicht vom Verfasser)

Erscheinungsjahr:: 1992

Sprache:: Englisch

Anmerkung:: Der vorliegenden Text wurde post mortem (1998) mit geringfügigen Änderungen publiziert.

Thema:: Wirtschaftsgeschichte, Wirtschaftstheorie, aktuelle Entwicklungen

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

Signatur:: S/M.78.1

Nutzungsrechte:: Rechte vorbehalten

Zugriff:: Freier Zugriff Rechte vorbehalten

DOI:: https://doi.org/10.48671/nls.js.AC14446488

case more special in that it applies only to assets of a certain type, and yet more general in that it holds also in underemployed economies. In both cases the shift in distribution is the essential feature. There is nothing strange then, after all, in the concept of saving needed to finance not only real investment but also the increase in price of assets with inflexible supply. VI11. CAPITAL GAINS AS A RETURN ON THE ASSET. The price of the asset is ultimately based on what it yields (dividend for a share, rent for land). For anybody, however, who is not determined to hold the asset for ever the expected future price will also be important. The full return on the asset will therefore consist of two terms Return = Yield + appreciation. r = y + a. In the simplest case if the yield, say the dividend, is constant as a proportion of the asset price and the rate of return r is also constant the asset price A will be At = R/r = ( yAt + aAt )/r where a = ( At+l/At - 1 ) • r = y + a. The present price depends, therefore, on the future price of the asset. The rate of return of the share r will be higher than what you would get from holding a bond at fixed interest because of the greater risk involved in the investment. What course of events can justify a continuous increase in the price of the asset (the share) that is, a positive a ? The answer is: The internal accumulation of retained profits in the firm which will make it possible in future to pay dividends at a constant rate on an increasing value of the share. We may then regard a also as an estimate of the increase in the real earning capacity of the firm which, if it happens to be realistic will make it possible for the price of the share to rise continuously without the holders being ultimately disappointed. Now the above considerations are very abstract: They do not tell us what happens, how the share prices are formed, they tell us only what would have to happen if a smooth development were to result. In reality it is important that there are two types of holders of shares: The long term holder is strongly interested in the dividend. For him the knowledge of the future dividends would

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