He studied economics, statistics, and mathematics at the Free University Berlin before he took an MA in mathematical economics at the University of Minnesota. His Ph.D. was on stochastic programming from the Technical University of Berlin. He was director of the Interdisciplinary Institute of Environmental Economics at the University of Heidelberg. He has published widely in capital theory, public choice, the concept of entropy in environmental economics, and the philosophical foundations of ecological economics. He studied physics and economics at the Technical University of Munich and the University of Heidelberg. His Ph.D., from the University of Heidelberg, was on the time-lagged accumulation of capital and pollution stocks. He has published in capital theory, the valuation of ecosystem goods and services, structural change, decisions under uncertainty, and intertemporal decision making and discounting. The authors are grateful to Kate Farrell and Thomas Peterson for valuable comments on an earlier draft.
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Heterogeneity and Time
From Austrian Capital Theory to Ecological Economics
Article first published online: 30 AUG 2006
DOI: 10.1111/j.1536-7150.2006.00475.x
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How to Cite
Faber, M. and Winkler, R. (2006), Heterogeneity and Time. American Journal of Economics and Sociology, 65: 803–825. doi: 10.1111/j.1536-7150.2006.00475.x
Publication History
- Issue published online: 30 AUG 2006
- Article first published online: 30 AUG 2006
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Abstract. Although heterogeneity and time are central aspects of economic activity, it was predominantly the Austrian School of economics that emphasized these two aspects. In this paper we argue that the explicit consideration of heterogeneity and time is of increasing importance due to the increasing environmental and resource problems faced by humankind today. It is shown that neo-Austrian capital theory, which revived Austrian ideas employing a formal approach in the 1970s, is not only well suited to address issues of structural change and of accompanying unemployment induced by technical progress but also can be employed for an encompassing ecological-economic analysis demanded by ecological economics. However, complexity, uncertainty, and real ignorance limit the applicability of formal economic analysis. Therefore, we conclude that economic analysis has to be supplemented by considerations of political philosophy.