IDEAS home Printed from https://ideas.repec.org/p/ehu/biltok/5726.html
   My bibliography  Save this paper

Dornbusch and Fischer on Capital and Income

Author

Listed:
  • Ormazabal Sánchez, Kepa Mirena

Abstract

In this paper I critically analyze the relationship that professors Dornbusch and Fischer establish among the concepts of GNP, NNP and aggregate income. In principle, aggregate income is NNP; indeed, the whole point of introducing the concept of NNP is to determine what is the income of the economy in the aggregate. The definition of NNP excludes depreciation from aggregate income. But depreciation must be made good, and it must be so out of current production. On the ground that the factors that produce the goods that make up for depreciation must be paid, Dornbusch and Fischer conclude that the value of the portion of current output that makes up for depreciation becomes income in the aggregate. Since it is indubitable that the value of the other portion of output (that which consists of the goods not required to make up for depreciation) becomes income too, then it follows that aggregate income is GNP, not NNP. Then, Dornbusch and Fischer hold contradictory views. The cause, which I attempt at diagnosing in this paper, is a miscomprehension of the nature of capitalistic production.

Suggested Citation

  • Ormazabal Sánchez, Kepa Mirena, 2002. "Dornbusch and Fischer on Capital and Income," BILTOKI 1134-8984, Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística).
  • Handle: RePEc:ehu:biltok:5726
    as

    Download full text from publisher

    File URL: https://addi.ehu.es/handle/10810/5726
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehu:biltok:5726. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alcira Macías (email available below). General contact details of provider: https://edirc.repec.org/data/deehues.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.