- JAPANESE ECONOMIC ASSOCIATION
- The Economic Studies Quarterly (ISSN:0557109X)
- vol.38, no.3, pp.212-222, 1987
Contrary to the static theories of investment, Keynes stated in the General Theory that the reduction of expected money-wage-rates in the future would reduce the investment in quantity. This assertion, however, cannot be supported by the Neo-classical theories such as Jorgenson models or adjustment models of investment. We construct his model described in the General Theory. The main character is that the models have the capital equipment with finite operating periods. Certainly, his models support the assertion in the simplest case. Moreover, we can see that more generalized models do not necessarily support them.