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A Neo-Austrian Perspective on the Value of Growth Prospects

Author

Listed:
  • Andrea Mantovi

    (Dipartimento di Economia, Università di Parma, Italy; The Rimini Centre for Economic Analysis, Italy)

  • Augusto Schianchi

    (Dipartimento di Economia, Università di Parma, Italy)

Abstract

The valuation framework inherent t the neo-Austrian theory of capital set forth by Hick’s (1973) is discussed in terms of a fundamental formula which disentangles the profitability associated with the scale of operation from the internal rate of return of the production process. The formula is employed to tailor a perspective on the value of investment prospects, meant to complement the insights embodied by Tobin’s q metric. Balance sheet recessions are briefly discussed as a cogent line of application of four formula. Potential lines of progress are envisioned.

Suggested Citation

  • Andrea Mantovi & Augusto Schianchi, 2015. "A Neo-Austrian Perspective on the Value of Growth Prospects," Working Paper series 15-41, Rimini Centre for Economic Analysis.
    • Handle: RePEc:rim:rimwps:15-41
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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