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Time, Space and Capital

Åke E. Andersson and David Emanuel Andersson

In this challenging book, the authors demonstrate that economists tend to misunderstand capital. Frank Knight was an exception, as he argued that because all resources are more or less durable and have uncertain future uses they can consequently be classed as capital. Thus, capital rather than labor is the real source of creativity, innovation, and accumulation. But capital is also a phenomenon in time and in space. Offering a new and path-breaking theory, they show how durable capital with large spatial domains — infrastructural capital such as institutions, public knowledge, and networks — can help explain the long-term development of cities and nations.
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Subject index

Åke E. Andersson and David Emanuel Andersson

accumulation of capital 3, 153, 162, 167, 260
accessibility 8, 35, 53, 84, 266
adiabatic approximation 260
advantage, comparative 11, 25, 175, 202, 255
agent-based models 146, 172
aggregation of capital 3, 148, 149, 156, 158
agricultural land 27, 29
algorithmic complexity 258, 259, 260, 263, 268
American city hierarchy 41, 42
Amsterdam 185, 199, 266
arbitrage pricing 150, 156, 181
asset pricing 146, 172
Asia 44, 94
autarchy 10, 11, 12
banks 22, 72, 171, 199, 200
bacteria 57, 63, 88
Bayesian theory 150
Beckmann model of location and trade 30, 32, 166
behavior 98, 127, 152, 220
bifurcation 64, 65, 67, 74, 177, 178, 189
Big Players 132
bonding and bridging social capital 236, 237
bounded rationality 191
business cycle 7, 62, 63, 68, 71, 132, 220, 229
capital portfolio 145
capital value 1, 13, 18, 127, 172
chaos 6, 81, 151, 152
Cobb-Douglas production function 3
cobweb model 131, 140, 151, 155
cognitive complexity 264
communication 161, 167, 168, 251
complex 1, 71, 81, 252
continuous 6, 25, 26, 32
creative destruction 70, 159, 186, 206
creativity 95, 162, 251, 255, 262
critical link 176, 177, 183, 189, 198, 199, 205
cusp 65, 74
decision making 23, 141, 155, 163, 188, 190, 230, 269
discrete time or space 4, 11, 24, 121, 152
divergence and trade
durability of capital 112, 211
duration of production 27, 106, 132
education 64, 88, 97, 102, 106, 130, 163, 164, 193, 213, 214, 223, 240, 249, 250, 253, 255, 274
El Farol model 142, 148
entrepreneurial judgment 134, 135, 138, 219
entrepreneurship 24, 69, 127, 172
existence of general economic
equilibrium 112, 159, 160, 166, 272
expectations 2, 13, 128, 140, 156
fast and slow processes 7, 8, 166, 170, 235
feedback 59, 61, 63, 64, 82, 143, 151, 216, 273
formal and informal institutions 8, 157, 164, 192, 235, 248
fractals 75, 76, 77, 79, 80, 150, 152
gradient law 28, 30, 54, 166, 191, 213
growth theory 3, 4, 112, 153, 161
general economic equilibrium 54, 65, 159, 161, 166, 274, 303
Hanseatic League 179, 182, 183
hedonic price 212, 213, 215, 218
housing affordability 227, 228, 229, 231
Industrial Revolution 189, 201, 207, 239
information 144, 168, 172, 207, 251
infrastructure 8, 36, 73, 74, 95, 159, 169
innovation 58, 68, 96, 118, 243, 256
inter-jurisdictional competition 194, 196, 197, 198, 199
interpersonal trust 236, 240, 244, 246, 248
Knightian uncertainty 133, 134, 140, 220
land use 10, 27, 29, 30, 32, 46, 84, 227, 229
learning 131, 142, 143, 148, 155, 172
life cycle hypothesis 98, 99, 100
location and trade 29, 30, 32, 118, 120, 121
logistical revolution 174, 179, 180, 185, 189, 197, 199, 201, 205, 276
materialism 81
Marxian economics 17, 95, 106, 149, 223, 254
mechanisms in economics 61, 81, 143, 166, 169, 206
multi-attribute good 213
multiple equilibria 62, 63, 64, 272
optimal harvesting 117, 127
post-materialism 95, 242
property rights 71, 134, 135, 138, 165, 193, 195, 230, 253, 254
rank-size distribution 33, 34, 35, 36
real estate capital 6, 149, 156, 209, 210, 212, 213, 214, 219, 224, 228
research and development 1, 14, 74, 88, 118, 136, 139, 162, 208, 250, 254, 255, 257, 262, 264, 265, 269
risk 2, 18, 23, 89, 108, 128, 133, 134, 144, 146, 149, 150, 156, 180, 264
saddle point 111, 113, 114, 275
scientific knowledge 35, 53, 88, 162, 252, 253, 255, 260, 275
spontaneous order 81, 82, 172
stability and instability 6, 24, 32, 64, 66, 127, 172, 271
system constraint 220, 221, 222
tacit knowledge 251, 252, 253, 258, 259
tatônnement 2
territorial public good 222, 223, 224
tolerance 2418
transaction cost 26, 119, 153, 175, 179, 190, 199, 202, 222, 240, 244, 245
transport cost 11, 12, 27, 31, 32, 118, 119, 121, 175, 190, 203, 204
trust 195, 196, 197, 198, 236, 240, 243, 246, 248
uniqueness of general equilibrium 32, 128, 160, 272
variational inequality 26, 121, 273
working time 101, 102, 103, 111