e perceived to
affect economic decisions are considered in terms of long-term
effects and short-term effects. Keynes recognized that the
marginal efficiency of capital depends on the relation between
the supply price of a capital asset and its prospective yield
(Keynes, 1936, p. 147). He contended further that expectations
of prospective yields are based partly existing facts, which we
can assume to be known more or less for certain, and partly on
future events, which can only be forecasted with more or less
confidence (Keynes, 1936, p. 147). The future events are the
ones which Keynes considered to be long-term expectations
(Keynes, 1936, p. 148). As contrasted with long-term
expectations, Keynes perceived short-term expectations within the
...