On Feb 1, 2009, at 6:22 PM, Doug Henwood wrote:
>
> On Feb 1, 2009, at 6:09 PM, Shane Mage wrote:
>
>> So why did Keynes pay so much attention to this MEI schedule?
>
> Expected rate of return, which is what motivates fresh investment.
> As I recall Shaikh's stock market paper, it was realized rate of
> return on new investment.
Footnote: the expected ROI is crucial to the "hurdle rate" - the minimum rate of return necessary for a corp to undertake an investment project. When I was researching Wall Street, I read some survey work showing that American managers had a much higher hurdle rate - 20-25% - than their European and Japanese counterparts. Wall Street pressure - the shareholder revo - pushed the hurdle rate higher.
Doug