Roundaboutness

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Roundaboutness, or roundabout methods of production, is the term used to describe the process whereby capital goods are produced first and then, with the help of the capital goods, the desired consumer goods are produced.

The term was devised by the Austrian School economist Eugen von Böhm-Bawerk, who maintained that it was consumer demand, and not necessarily the supply of savings, that would determine the capital investment in any industry.

The concept has similarities to the later Keynesian theory developed in the 1930s.

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