into physical capital holdings. That can be notated z, . I don’t allow transfer from physical to human capital in adults, which would mean invested consumption C, afforded from property cash flow, because I see so little adult C, (adult education) on which to spend it. That’s why I model 7, aS Zero. Meanwhile realized decapitalizaiton is decomposed into its human and physical components D(H), and
D(K), . This adapts (A4.4) to
K,=H+K=W.+P. + p({K),,+2,-D(H),-D(K),, ifage >=A, (A10.6)
and specifically
H=W,-D(H), and K=z,+P+p(K),—D(K),, ifage >=A.
(A10.7)
Next Generation Theory
The period of production, as defined by Jevons and Boehm Bawerk, gave the reciprocal of rate of production (rate of return Y/K,, ) if growth were zero. Output Y
equals growth plus cash flow. Then Jevons and Boehm Bawerk really meant the
period needed for output to make up for losses to cash flow. I call this the “cash flow
period” T, , equal to the reciprocal of cash flow rate f. That is,
(A11.1)
Both modeled at the collective scale, where cash flow under the Y=I+C equation both would have accepted simplifies to consumption C. Adjustment to the Y rule
corrects this to pure consumption C, . That would specify (A11.1) as
APPENDIX A: The Argument in Notation 3/7/16 26
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