ABSTRACT
Capital theory appears to have two balancing sides to it. On the one hand, it is a very abstract and obscure area in economic theory. On the other hand, capital theory is embedded in all economic fields. A semantic turn on the meaning of “capital” and the mathematical simplifications needed by formal models explains much of it. The persistence of duration behind the scenes in the evolution of capital theory raises some questions. The authors argue that duration is the concept that capital theorists have sought for years but were not able to find because of the semantic-and-assumptions trap. A financial application to capital theory sheds light on issues such as managerial economics, Cantillon effects, business cycles, growth, and development.
