The Marginal Efficiency of Capital: Rejoinder

The Quarterly Journal of Austrian Economics

Tags: Capital and Interest Theory

04/30/2015 Quarterly Journal of Austrian Economics Edward W. Fuller

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Volume 18, Number 1 (Spring 2105)

ABSTRACT: What Engelhardt calculates in his comment is not the Marginal Efficiency of Capital. Engelhardt incorrectly ranks investment projects by Present Value instead of Net Present Value. Engelhardt does not prove that Keynes has a wealth maximizing theory of investment, so his comment is not a successful defense of Keynes’s theory.

KEYWORDS: John Maynard Keynes, marginal efficiency of capital, net present value

JEL CLASSIFICATION: E12, E22, E52, E58

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