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

Beschreibung:: 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.

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

Bezugswerk:: 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

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

The situation ought not to be different in principle if the transactions are not carried out by means of bank credit but with the purchasers own funds. The vendor receives a sum which is more than sufficient to replace the funds which he in his turn used up when he purchased the land. The capital gain represents an increase in the sum of financial assets which ideally represent the counterpart of the land. There is thus an increase in the value of assets which represents saving. If this statement is not easy to accept for traditional Keynesian theory this is due to the idea that saving should represent something real like reproduceable capital and not the finance of a mere change in value. But in fact this idea is anyhow abundoned since it is recognised that budget deficits require saving to be financed. We have only talked about hausse so far but the case of baisse might be thought to be symmetrical. We assume again finance by bank credit. The vendor receives less than he needs to pay back the debt he incurred when he purchased the land. The remaining debt - his capital loss - represents dissaving. If he repays it from his own funds the total bank credit outstanding will be reduced which involves a credit restriction. If he is not able to repay when he is pressed ( which may happen in view of expectations produced by the decline in values ) then he will become insolvent. This implies an assymetry of the effects of boom and bust. When there is general inflation capital gains may be illusory in so far as they do not enable the owner to consume it as long as he wants to keep his wealth intact. The gain must therefore be measured in terms of purchasing power of consumer goods or possibly in terms of wage units ( power to purchase labour for purpose of investing in reproduceable capital ). III. RICARDO*S RENT. If land is valued at the price paid when it last changed hands then the value of land consists of the accumulated capital gains of the successive vendors of the land. The value of the land in so far as it is not directly owned has its counterpart in an equal value of financial instruments which served to finance the successive purchases in the same way as reproduceable real capital has its counterpart in the instruments of credit which made its coming into existence possible. The current increase in land value, as far as it is realised ( by the land changing hands ) is financed by saving in form of financial assets. Since these gains seem to be quite sizeable it appears that Ricardo *s rent has not

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