Chapter_14　Investment Spending多恩布什宏观经济学（）PPT教材课程.pptVIP

Chapter 14 Investment Spending Item Item Item Etc. McGraw-Hill/Irwin Macroeconomics, 10e ? 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. 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 [Insert Figure 14-1 here] 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 Flow of investment is quite small compared to the stock of capital. 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 marginal product of capital is the increase in output produced by using 1 more unit of capital in production. The rental (user) cost of capital is the cost of using 1 more unit of capital in production. From Desired Capital Stock to Investment Figure 14-4 illustrates an increase in the demand for capital stock as a rightward shift in the demand for capital schedule At the initial level of capital, K0, the price of capital is just high enough to generate enough investment, I0, to replace the depreciating capital In the LR, supply of new capital is very elastic, so the increase in demand is met without much change in price In the SR, price rises to P1, increasing investment flow to I1 [Insert Figure 14-4 here] Capital S