Document Type

Article

Publication Date

January 2019

ISSN

0890-913X

Abstract

Principles textbooks have improved in incorporating entrepreneurship intheory. However, they still generally lack simple demonstrations of theentrepreneurial input, particularly when teaching the theory of a normal rateof return. Many texts are unclear over the definition of a normal return andits constituent parts. Our paper (1) reviews the theory of the entrepreneurialinput; (2) sorts how popular textbooks calculate a normal rate of returnconsistent with their definition of the entrepreneurial input; and (3)provides a simple numerical example that incorporates the entrepreneurialinput, which can be more fully developed in intermediate texts.

Comments

This article was published in The Journal of Private Enterprise, volume 34, issue 3, 2019, and can also be found online here.

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