A Note on the Marginal Efficiency of Investment and Related Concepts Available to Purchase

A simple neo‐classical theory of the demand for capital goods service is presented to clarify the relationship between the marginal productivity of capital and Keynes′s concept of the marginal efficiency of capital. How the latter concept is related to con‐temporary understanding of the marginal efficiency of investment is illustrated,while Keynes′s pessimism regarding stagnant investment is explained within the framework of neo‐classical theory.