the partial exception of Becker. I will generally prefer (5.3a), although the two are
identical in meaning.
Schultz’ analysis of consumption found
consumption = invested consumption + pure consumption. (5.4)
This plus (5.1) and (5.3a) combine for
output = total growth + pure consumption = investment + human growth + pure consumption = investment + invested consumption + self-invested work — recovered human depreciation + pure consumption = investment + invested consumption + self-invested work — recovered human depreciation + consumption — invested consumption = investment + consumption + self-invested work — recovered human depreciation. (5.5)
“EX post net”, as always, should be understood before both “output” and
“investment”.
Chapter 6 will revisit this logic once again, and add a second way to the same
conclusion.
The Growth Equation Under the Y Rule
(5.1) can be arranged as total growth = output - pure consumption, (5.1a) as a counterpart to (4.1a). Total growth means growth in total capital. My argument
continues as in Chapter 4. Since (4.2) was a blind alley, skip to (4.3). That now
becomes
Chapter 5 Bringing Human Capital In 1/13/16 7
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