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In economics, putty-putty describes an attribute of capital in financial models. Putty-putty capital can be transformed from flexible capital into durable goods then back again. This contrasts with putty-clay capital which can be converted from flexible capital into durable goods but which cannot then be converted back into re-investable capital.

References

1. Hu, Sheng Cheng (1972). "Putty-Putty Versus Putty-Clay: A Synthesis". International Economic Review. 13 (2): 324–341. doi:10.2307/2526028. JSTOR 2526028.

Further reading

• Atkeson, Andrew; Kehoe, Patrick J (September 1999). "Models of Energy Use: Putty-Putty Versus Putty-Clay". American Economic Review. 89 (4): 1028–1043. doi:10.1257/aer.89.4.1028.

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