Analysis of capital consumption and replacement for the firm and for the economy

Few subjects can be more provocative for the economist than the relationship between economic theory and practical policy, although, as Launcelot Gobbo said, "It is a wise father that knows his own child." The purpose of the present inquiry is not so much a concern with the causal sequence of events as an examination of the reciprocal relationship between the economic premises and the treatment of the subject of capital consumption and replacement in the contemporary professional literature, in the national income accounting, and on businessmen's books, and the implications of this relationship for economic and statistical analysis and for fiscal policy.