The Kaldor/Knight controversy: Is capital a distinct and quantifiable factor of production?

Avi Cohen

The European Journal of the History of Economic Thought, 2006, vol. 13, issue 1, 141-161

Abstract: Controversy focuses on three questions: Is capital a distinct factor of production? Is capital quantifiable in a theoretically consistent manner? Are process stories necessary around convergence to, or changes in, equilibrium interest rates? To all, Kaldor answers 'yes' to Knight's 'no'. The controversy is historically important in: 1) shifting issues in recurring twentieth century capital theory controversies from periods of production to production functions, from roundaboutness to diminishing returns; 2) revealing Knight's position on increasing knowledge offsetting diminishing returns over time as an unacknowledged 'precursor' of new growth theory; 3) marking the turning point for Kaldor's attachment to Austrian theory.

Keywords: Kaldor; Knight; capital; production functions; Austrian capital theory; diminishing returns (search for similar items in EconPapers)
Date: 2006
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DOI: 10.1080/09672560500522801

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