Since Malthus and the days of the long-term conceptions ofthe other classical econ omists - an era characterized so poignantly by W.]. Baumol as the magnificent dynamics - demography has not featured prominently in economics. Although admittedly post-war growth theories have always included the growth ofthe volume of labour as an exogenous variable in their considerations, this did not receive the explicit attention of economists. Analyses of the capital market tended even less to draw attention to or inspire interest in the demographic element, despite the fact that the savings behaviour...

In most Keynesian-type macroeconomic models the financial sector is modelled in terms of money demand, money supply and money market equilibrium. The market equations for private and government debt, i.e. credit, are implicit in these models by virtue of Walras' Law and need not be explicitly specified. Market equations for existing physical capital, or shares in capital, are absent from these models on the tacit assumption that physical capital cannot be traded and, consequently, has no market price. Money in these models is a substitute for private and government debt, not for current...