Investment, Volume 1
These studies of the cost of capital will inspire and guide policy-makers who share the goal of making the allocation of capital in a market economy more efficient.
Volume 1 presents pioneering studies of the cost of capital as a determinant of investment expenditures. The cost of capital summarizes the future consequences of investment essential for current decisions. This concept has become an indispensible tool for studying the dynamics of investment behavior. Both macroeconome tric models and intertemporal general equilibrium models have employed the cost of capital as a determinant of short- and long-term investment expenditures.
About the Author
Dale W. Jorgenson is Samuel W. Morris University Professor of Economics at Harvard University.
"Dale Jorgenson . . . is preeminently the master of the territory between economics and statistics, where both have to be applied to the study of concrete problems. His prolonged exploration of the determinants of investment spending, whatever its ultimate lessons, will certainly long stand as one of the finest examples in the marriage of theory and practice in economics." —John Bates, Clark Medal citation by the American Economic Association
“Dale Jorgenson is a pioneer and leading figure in the study of investments decisions. This book, which collects many of his classic papers on investment, reminds us of just how central his contributions to the subject have been.”
—Ben S. Bernanke, Class of 1926 Professor of Economics and Public Affairs, Woodrow Wilson School, Princeton University
“Dale Jorgenson’s Cost of Capital launched a revolution in macroeconomic theory by applying microeconomic reasoning about firms and individuals to macroeconomic issues. Capital Theory and Investment Behavior collects all of Jorgenson’s seminal works in one volume. It is a book that serious students of both micro and macroeconomics should want to own.”
—Lawrence Summers, former Nathaniel Ropes Professor of Political Economy, Harvard University
“Dale Jorgenson was a pioneer in modern economic dynamics. This book contains his classical original papers on investment, followed by a marvelous collection of subsequent work. For anyone interested in investment behavior, this is the place to start.”
—Robert E. Lucas Jr., John Dewey Distinguished Service Professor, Department of Economics, The University of Chicago, and recipient of the 1995 Nobel Prize in Economics
“Dale Jorgenson has contributed more than anyone else to our modern understanding of investment spending and its dependence on taxes and other policy instruments. Among other things, he developed the concept of the user cost of capital, and elucidated its fundamental role as a determinant of investment behavior. This important volume brings together many of Jorgenson’s most influential papers, describing the theory and measurement of the cost of capital, the dynamics of capital accumulation, and the econometric modeling of investment behavior.”
—Robert S. Pindyck, Mitsubishi Bank Professor of Applied Economics, Sloan School of Management, MIT
“The birth and subsequent development of the modern theory of investment is recorded in this book. Jorgenson’s work represents a marriage of theory, measurement, and econometrics.”
—Fumio Hayashi, Professor of Economics, Columbia University
“For more than three decades, Dale Jorgenson’s theoretical and empirical work on investment has defined the standard of excellence that all others in the area strive to match. This collection of his papers will serve to instruct and inspire researchers and students in the future.”
—Avinash K. Dixit, John J. F. Sherrerd University Professor of Economics, Princeton University
“The papers collected in Jorgenson’s first investment volume transformed the profession’s thinking about investment. Investment theory today always takes the Jorgenson model as the starting point. The work sets an example of tight integration of theory and empirics imitated but rarely matched in other areas of applied economics.”
—Robert E. Hall, Professor of Economics, Stanford University