Epstein Secrets

vailable for business to borrow and invest. But business lacked the “animal spirits” to take such a risk ina slump. We saw the same story after 2008. Keynes’ proposal was for government to do the borrowing and investing instead. That’s part of the “fiscal policy” I described in Chapter 1. Here we tend to

saving is invested, as I use the word, but finds different returns. Saving under the mattress is investment at zero return, and drops output just as Keynes said. Investment at the current average return keeps output unchanged. That’s what Keynes meant. But investment at lower returns lowers output, and c

s present value of future pay less spending on future childhood nurture plus textbooks or tuition or job training (collectively called “schooling” by Mincer) invested in human capital. Ben-Porath knew that, as had others before, but reasoned that investment in anything must stop when not enough time remai

d their market value in return, as if on the books of a firm. Chapter 6: Parallels with the Firm 2/4/16 21 HOUSE_OVERSIGHT_011055 Marshall’s pupil Keynes was thoroughly a marginalist, as are economists in general today and as am I. One of the features of his General Theory of 1936 was a kind of double-

t the human capital of children. But Farr deserves credit for pointing out that human capital in general capitalizes pay less invested consumption. Keynes’ teacher Alfred Marshall agreed with Farr in 1990’. As I read this passage, Marshall interpreted maintenance consumption as investment. So did B. F.

implify. But I just showed why I model all consumption after, or anyhow after a few months of job training, as Schultz’ pure kind. Here I would fault Mincer and his pupil Becker, but not Schultz or Ben-Porath, for too much focus on the potential of job training. It exists and is crucial. But it is so smal

ht also be surprised at my choice of benchmarks in verse and economics. Masefield and Mill? A consensus might have picked T. S. Elliot, say, and Lord Keynes. Masefield and Mill are likelier to be remembered as old-fashioned fuddy-duddies already outmoded when they wrote. But that’s me. I am Don Quixote. N

b paragraph on growth. The candidates for third seem well behind. Maybe Jevons or John Rae or Leon Walras. Time has not been kind to the teachings of Keynes. I would now rank his teacher Alfred Marshall higher. I like Myrdal’s magnificent ex ante - ex post distinction. Boehm Bawerk and the Austrian school

ght have room for him. Am I being too tough on later economists? We should not forget Schultz and Ben- Porath. Schultz’ greatest achievement, unless Mincer beat him, was in spotlighting human depreciation. That left me to ask where this huge flow goes. The answer becomes inescapable once we focus on the