ABSTRACT
After pointing out that Hicks’ theory of the firm is not adequate as the base from which investment functions of firms are to be generated, it is further pointed out that his ideas of IS and ML curves are inconsistent with his general equilibrium approach in Value and Capital. In the present paper it is also shown that the theory of the firm which I have proposed in an earlier book of mine is able to derive both the demand and supply functions of money and securities and the physical investment function. It is important to have one entire theory that can explain financial and physical aspects of investment behavior of entrepreneurs simultaneously.
