where 4 (lambda) is deadweight loss. Meanwhile negative output belongs in the unrealized component of output Y. as with all effects on net capitalization not
explained by transfer in or plowback from revenue. It is the random negative
component in free growth. Then define positive and negative output and realized
output more fully by
Y,(>0)=max(¥,,0), Y,(<0)=max(-Y,,0)=4, Y,=Y,(>0)-A, (A4.1) and
Y(>0)=max(Y,0), Y(<0)=max(-Y,0)=A and Y=Y(>0)-/. (A4.2)
There is also indirect capitalization from inside in the form of plowback from revenue. The growth truism sums these inflows less outflows as
K,=7_+Y,(>0)+p,-D=t_+Y¥,+p,—D,, (A4.3)
recalling that D, shows recovered (realized) decapitalization.
At the scale of the total capital of any individual or set of them, (A1.5) and (A4.3)
give K,=y_+Y, +p,-C,. (A4.4)
Human Cash Flow
Although I can’t recall seeing the term “human cash flow” in any papers or textbooks of others, tradition defines the flow discounted to human capital as pay less Schultz’ “pure investment”. The flow so discounted is implicitly cash flow. | rename pure
investment “invested consumption,” and write the traditional view as
APPENDIX A: The Argument in Notation 3/7/16 11
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