A theory of overlapping generations of fixed capital

Abstract

Although economic science has a theory and a model of overlapping (uneven-aged) generations of a population, it lacks a similar theory for fixed capital. The authors of this article attempted to fill this gap. The basic prerequisites of the new theory and model are, first, the unjustly forgotten theory of the circulation and reproduction of capital and, second, evolutionary economic theory, according to which an economy is coordinated and ordered only in motion. This type of coordination is fundamentally different from that used in the economic mainstream. US statistics–based tests of the model have shown its realism.