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 | | Money Capital in the Theory of the Firm: A Preliminary Analysis by Douglas Vickers ISBN-10: 9780521328418 ISBN-10: 0-521-32841-1 ISBN-13: 9780521328418 ISBN-13: 978-0-521-32841-8 Hardcover 1987-06-01 Cambridge University Press Find Lowest Price |
Editorials | ||
Product Description The place of money capital in the theory of the firm has remained a relatively neglected question in traditions of economic analysis. In this highly integrative work, issues in production, pricing, capital investment and financial theory are brought to new levels of interdependence. Developing a three-part argument, Money Capital in the Theory of the Firm deals successively with the theoretical issues and analytic motivation, the neoclassical tradition and postclassical perspectives. In doing so, it presents a self-contained foundation in the basic structures of microeconomic analysis relating to optimize decision making in the firm and in the accounting concepts and statistical apparatus of probability theory relevant to the neoclassical aspects of the argument. Additionally, the book provides the essential mathematical development of such advanced topics as utility functions defined over stochastic arguments, the equilibrium theory of financial asset prices and yields, the cost of money capital, and investment decision criteria. This book makes an important contribution to the formation of new and analytically richer perspectives in the important area of economics it addresses. It will be of particular interest to those working in economic theory and microeconomics, and their advanced students. | ||
Book Description This highly integrative work presents a self-contained foundation in the basic structures of microeconomic analysis relating to optimization of decision making in the firm and relevant aspects of probability theory. | ||
Reviews | ||
Vickers,like Shackle,has his own definition of uncertainty Vickers' definition of uncertainty,used over 120 times in this book,is the same as the definition given by G L S Shackle repeatedly for over 50 years.It goes something like this.Anyone who claims that they have any knowledge of probabilities that they intend to apply to unknown future outcomes can't be talking about uncertainty.This is because knowledge(certainty)is the polar opposite of uncertainty(un knowledge or no knowledge).This definition is problematic and ambiguous.Individuals who find such a definition applicable will be well served by reading this book.The main criticism that I have occurs when the author implies that J M Keynes had the same definition of uncertainty as the definition given above.In fact,Keynes's definition is much broader than Shackle's and includes the Shackle definition as a special case that is not generally applicable in the real world.For Keynes,uncertainty is a range which extends from the Shackle case of complete or total uncertainty(what Keynes called the case of ignorance)through intermediate cases of partial uncertainty ,where the probability estimates or set of possible probability distributions or the size of the probability interval is regarded as being more or less reliable ,to the case of complete or total information ,where one unique probability distribution would be defined.Keynes's definition of risk requires this last case,where the weight of the evidence,w,would be equal to 1.Keynes would assign the Shackle case a w equal to 0.INTERMEDIATE DEGREES OF WEIGHT REFLECT INTERMEDIATE DEGREES OF UNCERTAINTY.Only in the case of investment in long lived capital goods subject to being made obsolete by future technological innovation and change do the approaches of Keynes and Shackle-Vickers merge.Here, the ignorance of the future can lead to extremely high liquidity preferences on the part of manufacturers and hence increases in the amount of involuntary unemployment.While this case is very important,it can't sustain the generality of application claimed for it by Shackle-Vickers (to extend to decision making in general). | ||