《宏观经济学教学课件》Chapter_14.pptVIP

Introduction Investment: Links the present to the future Links the goods and money markets Drives much of the business cycle In this chapter we study how investment depends on interest rates and income Figure 14-1 illustrates the volatility of investment by comparing investment and GDP Introduction The theory of investment is the theory of the demand for capital Investment is the flow of spending that adds to the stock of capital Both GDP and investment are flow variables Capital is the dollar value of all the buildings, machines, and inventories at a given point in time ? stock value Investment is the amount spent by businesses to add to the existing capital stock over a given period The Desired Capital Stock Firms use capital, along with labor and other resources, to produce output ? The goal of a given firm is to maximize profits When deciding the optimal level of capital, firms must balance the contribution that more capital makes to their revenues against the cost of acquiring additional capital The Desired Capital Stock To derive the rental cost of capital: firms finance the purchase of capital by borrowing over time, at an interest rate of i In the presence of inflation, the nominal dollar value of capital rises over time Real cost of capital = nominal interest rate - nominal capital gain At the time the firm makes an investment, the nominal interest rate is known, but the inflation rate for the coming year is not Real cost of borrowing is the expected real interest rate: Capital wears out over time ? must include depreciation, d The complete formula for the rental cost of capital is: The Desired Stock of Capital Firms add capital until the marginal return of the last unit added drops to the rental cost of capital Diminishing marginal product of capital means that each successive unit of capital yields less than the previous unit ? Figure 14-2 An increase in the rental cost of capital can only be justified by an increase in the marginal product of ca