Three logical possibilities as to what an entrepreneur should maximize: the internal rate of return, total profits, rate of profit over cost, 56. — I. The use of these criteria in the literature on the theory of capital and interest, 57. — II. The case of tree-growing: the internal rate of return, 63; total profits, 66; choice between them when a market rate of interest exists, 68; when no market rate exists, 70. — III. Total profits vs. rate of profit over cost, 71. — Where entrepreneur's funds are not limited, 75. — Financing by stock and by debts, 76.

I. Assumptions, 36. — Five propositions concerning the relationship between short and long rates, 37. — II. Influence of the costs of investment, 41. — Shiftability on the lenders' side, 43. — Two complications: many maturities, 44; the function of banks as changers of maturities, 45. — III. The influence of risk, 46. — IV. Expectations: the rational investor's decisions, 48; possible inconsistencies, 49. Effect of divergent expectations among members of the market, when the majority expect rising interest rates, 51; when "the market" expects rates to fall, 54. — V. Verification: movement of interest rates over time, 55; structure of yields on different maturities, 56. — VI. Bearing of this analysis on: influence of the discount rate on investment, 60; interest and the marginal efficiency of capital, 60; influence of wide gaps between short and long rates, 61; the "liquidity theory of interest, " 62.

Journal Article Final Comment Get access F. A. Lutz F. A. Lutz Princeton University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 53, Issue 4, August 1939, Pages 627–631, https://doi.org/10.2307/1883283 Published: 01 August 1939

Keynes I. Saving and investment may differ, 589.— Significance of the concepts as used here, 591.— Valueless for monetary policy, 594.— Robertson. The “day,” 595.— Consequences of this change, 597.— Applicable only under certain conditions, 598.— Similar concepts, 600.— The ex ante and ex post concepts. Myrdal, 602.— Usefulness of these concepts, 604.— Comparison with Robertson, 604.— Active and passive investment and saving, 607.— Keynes II. Saving always equals investment, 608.— Association with the multiplier, 608.— Comparison with classical view, 611.— Conclusions, 613.