J Econ (2012) 106:99–118 DOI 10.1007/s00712-011-0231-y Walras’ theory of capital formation: an intertemporal equilibrium reformulation Galeazzo Impicciatore · Luca Panaccione · Francesco Ruscitti Received: 26 May 2010 / Accepted: 24 July 2011 / Published online: 17 September 2011 © Springer-Verlag 2011 Abstract We develop a mainstream reformulation of the original Walras’ model of capital accumulation. We overcome the shortcomings of the original model. First, we prove the existence of intertemporal competitive equilibria. Our proof combines a well known theorem due to Yannelis and Prabhakar (J Math Econ 12:233–245, 1983) with a lemma due to Geanakoplos (Econ Theory 21:585–603, 2003). Secondly, we remedy the indeterminacy of allocation of savings across multiple types of capital goods by introducing a storage technology. Finally, we show that, for stored capital goods, the equality of rates of returns emerges endogenously in equilibrium, while it was imposed by Walras from the outset in his original contribution. Keywords Walras · Capital goods · Activity analysis · General equilibrium JEL Classification B21 · C60 · C62 · D51 G. Impicciatore Dipartimento di Economia Pubblica, Università degli Studi di Roma “La Sapienza”, Rome, Italy e-mail: galeazzo.impicciatore@uniroma1.it L. Panaccione (B ) Dipartimento di Economia e Istituzioni, Università degli Studi di Roma “Tor Vergata”, Via Columbia 2, 00133 Rome, Italy e-mail: luca.panaccione@uniroma2.it F. Ruscitti Department of Political and Social Sciences, John Cabot University, Rome, Italy e-mail: fruscitti@johncabot.edu 123