The Structure of Production and Portfolio Decisions of Investment
type: CreativeWork
description: Orthodox portfolio theory is at the center of the way neoclassical economics understands private investment and economic policy. Nonetheless, this theory is highly vulnerable to multiple criticisms, and its empirical validity is doubtful. This dissertation proposes an alternative to orthodox portfolio theory. The methodological core rests on the fact that the future in economics is fundamentally uncertain. This work proposes a methodology that refocuses the epistemic problem of decision-making, from predictive methods, to the generation of a language that acknowledges society’s capacity to create its economic future. The two analytical methods used here: 1- The Potential Surprise Function and 2- The Sraffa-Pasinetti framework, are compatible with this aim. The present dissertation identifies and develops a new concept that, in spite of its crucial importance, has remained hidden in the literature: The notion of the production commitment. The latter projects itself as the general form of money and financial assets. The present dissertation shows how the financial and the productive sides of the economy are inherently connected. Collective production requires division of labor. Division of labor requires the formulation of production commitments. The latter are, by definition, based on expectations. By unveiling the production commitments in the Sraffa-Pasinetti framework, the present work proposes a way to assess the compatibility of the current structure of production and the required structure of production commitments, with the existing structure of financial assets. The proposed methodology generalizes the inter-sectoral approach proposed by Keynes’ General Theory, with the inter-industry side. The structure of production is in continuous transformation due to the effects of production commitments, innovation and surprise. A language compatible with this transformative character of the economy is required. This is the role of the potential surprise function. Beca…
abstract: Orthodox portfolio theory is at the center of the way neoclassical economics understands private investment and economic policy. Nonetheless, this theory is highly vulnerable to multiple criticisms, and its empirical validity is doubtful. This dissertation proposes an alternative to orthodox portfolio theory. The methodological core rests on the fact that the future in economics is fundamentally uncertain. This work proposes a methodology that refocuses the epistemic problem of decision-making, from predictive methods, to the generation of a language that acknowledges society’s capacity to create its economic future. The two analytical methods used here: 1- The Potential Surprise Function and 2- The Sraffa-Pasinetti framework, are compatible with this aim. The present dissertation identifies and develops a new concept that, in spite of its crucial importance, has remained hidden in the literature: The notion of the production commitment. The latter projects itself as the general form of money and financial assets. The present dissertation shows how the financial and the productive sides of the economy are inherently connected. Collective production requires division of labor. Division of labor requires the formulation of production commitments. The latter are, by definition, based on expectations. By unveiling the production commitments in the Sraffa-Pasinetti framework, the present work proposes a way to assess the compatibility of the current structure of production and the required structure of production commitments, with the existing structure of financial assets. The proposed methodology generalizes the inter-sectoral approach proposed by Keynes’ General Theory, with the inter-industry side. The structure of production is in continuous transformation due to the effects of production commitments, innovation and surprise. A language compatible with this transformative character of the economy is required. This is the role of the potential surprise function. Beca…
author: Cantillo, Andres Felipe
language: en_US
date published: 2016
date modified: 2026-07-24T05:17:24Z
provider: University of Missouri - Kansas City
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: University of Missouri–Kansas City

PropertyValue
property ID: Handle
value: https://hdl.handle.net/10355/58441