tag:blogger.com,1999:blog-28755195.post1167183035154162612..comments2023-09-25T04:26:51.568-06:00Comments on The Barefoot Bum: Some of what I know (or believe) about economicsLarry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-28755195.post-52972173176505192542013-01-26T04:08:09.864-07:002013-01-26T04:08:09.864-07:00Here's your post: Capital as sunk costHere's your post: <a href="http://barefootbum.blogspot.com/2013/01/capital-as-sunk-cost.html" rel="nofollow">Capital as sunk cost</a>Larry Hamelinhttps://www.blogger.com/profile/08788697573946266404noreply@blogger.comtag:blogger.com,1999:blog-28755195.post-45764740838915069082013-01-25T06:27:56.634-07:002013-01-25T06:27:56.634-07:00I think I may be getting the sense of it--is it th...I think I may be getting the sense of it--is it that once someone has spent money on capital, that money is spent & can't really be recovered through sales of whatever that capital is used to produce? I would appreciate further explication of this, as you offered. If possible, please include an explanation of how (and examples of) institutions socialize the sunk cost of capital.Greggnoreply@blogger.comtag:blogger.com,1999:blog-28755195.post-43179938782263764252013-01-24T21:09:03.360-07:002013-01-24T21:09:03.360-07:00Excellent question. The short answer is that I bel...Excellent question. The short answer is that I believe the natural rate in a CIIE would be zero because capital is a sunk cost, unrecoverable in a perfectly competitive market; without some institutions to socialize that cost, no one would recoup her investment. If you like, I can expand the point in a post.Larry Hamelinhttps://www.blogger.com/profile/08788697573946266404noreply@blogger.comtag:blogger.com,1999:blog-28755195.post-67062734546612403362013-01-24T19:06:50.966-07:002013-01-24T19:06:50.966-07:00Why do you believe that "In an advanced, capi...Why do you believe that "In an advanced, capital-intensive industrial economy, the "natural" micro rate of investment, i.e. the rate of investment that would occur if there were no specifically macroeconomic institutions, i.e. the government, is negative. In other words, left to themselves, individuals would let existing capital rot until we were no longer an advanced industrial economy."?Greggnoreply@blogger.com