Economics Dictionary of ArgumentsHome
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| Return on Investment: Return on Investment (ROI) measures the profitability of an investment by comparing its gain or loss to the initial cost. It is calculated as ROI = (Net Profit / Investment Cost) × 100%. Used in finance and business, it evaluates efficiency but ignores factors like time and risk. See also Returns to scale, Capital._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Irving Fisher on Return on Investment - Dictionary of Arguments
Harcourt I 93 Return on investment/Fisher/Harcourt: Irving Fisher's theory is concerned principally with the determination of a rate of return on investment as the outcome of the interplay of the forces of productivity - the technical possibilities of transforming present goods into future goods as given by well-behaved investment-opportunity schedules - with those of thrift - the sub- jective rates, as given by their respective indifference curves, at which individuals swap present goods for future goods: see Hirshleifer [1958](1). Capital is not mentioned explicitly though investment is. Borrowing and lending possibilities are also intro- duced so that individuals and, latterly, societies, are not confined to points of tangency of their indifference curves with investment-opportunity schedules alone: see N. C. Miller [1968](2). 1. Hirshleifer, J. [1958] 'On the Theory of Optimal Investment Decision', Journal of Political Economy, LXVI, pp. 329-52. 2. Miller, N. C. [1968] 'A General Equilibrium Theory of International Capital Flows', Economic Journal, LXXVHI, pp. 312-20. _____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
F.M. Fisher I Franklin M. Fisher Disequilibrium Foundations of Equilibrium Economics (Econometric Society Monographs) Cambridge 1989 Harcourt I Geoffrey C. Harcourt Some Cambridge controversies in the theory of capital Cambridge 1972 |
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