Wicksell, Åkerman and von Stackelberg Carried on Böhm-Bawerk’s Theory by Dropping Several of His Restrictive Assumptions

Wicksell and Åkerman carried on von Böhm-Bawerk’s theory by successively dropping several of the restrictive assumptions mentioned above. K. Wicksell in his book Über Wert, Kapital und Rente [1893] introduced a second factor of production, land, and at the same time a second consumption good. In Vorlesungen über Nationalökonomie, Vol. I [1913] he used compound interest instead of simple interest calculation. This difference is important since in this case — contrary to von  Böhm-Bawerk’s model presented above — the length of the average production period is not independent of the interest rate. Consequently, Wicksell did not employ the concept of the average production period. 

While von Böhm-Bawerk and Wicksell were concerned with continuous-input-point-output models, Åkerman [1923/24] analyzed the point-input-continuous-output case which applies to the most important kind of capital goods, namely durable capital goods. 

We shall base our presentation on the further development of Austrian capital theory not on the contributions of Wicksell and Åkerman, but on an article by von Stackelberg [1941/43], which can be viewed as a culmination of the traditional Austrian theory. In this article not only the questions put forward by Wicksell and Åkerman are analyzed, but the problem of recycling of goods is dealt with as well. Despite its fundamental importance for the development of Austrian capital theory this article is, as far as we know, entirely unknown in the English speaking and almost entirely unknown in the German speaking literature. Since it appeared only in the German languarge, it will be inaccessible for most readers. For this reason, as well, it seems useful to present it here in greater detail. 

Von Stackelberg like von Böhm-Bawerk analyzed a stationary ecoomy. He dropped the last four assumptions of von Böhm-Bawerk’s model, A2.8-A2.11. Thus, he showed how recycling, durable capital goods and compound interest calculation can be taken into account and how the controversial concept of the average production period can be dispensed with.

—Malte Faber, Introduction to Modern Austrian Capital Theory, Lecture Notes in Economics and Mathematical Systems 167 (Berlin: Springer-Verlag, 1979), 20-21.