IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-1-349-05730-6_5.html
   My bibliography  Save this book chapter

The Investment Function

In: Macroeconomic Theory

Author

Listed:
  • Douglas Fisher

    (North Carolina State University)

Abstract

The theory discussed in Chapter 4, on the production function, can also form the basis of a study of the demand for labour and the demand for capital, whether the equipment, structures, inventory, or cash of business firms, as well as, by stretching a point, the demand for consumer durables, including especially that for housing. We may, for businesses at least, assume a profit-maximizing neoclassical aggregate firm and investigate its optimal capital and labour decisions; we may also adopt a cost-minimization framework, and this is often recommended on account of its ease of manipulation (and the existence of certain types of data). Note that we get from the profit/cost framework to the investment decision of the aggregate firm by introducing some explicit dynamics involving both (a) a formal stock flow dimension and (b) lags in decision-making and in implementing capital spending (once decisions to invest have been made). These matters will be taken up in Section 5.3, after we have considered some of the work prior to the synthesis now in common use; this latter may be referred to as a “neoclassical investment function” with a “flexible accelerator” mechanism.

Suggested Citation

  • Douglas Fisher, 1983. "The Investment Function," Palgrave Macmillan Books, in: Macroeconomic Theory, chapter 5, pages 269-347, Palgrave Macmillan.
  • Handle: RePEc:pal:palchp:978-1-349-05730-6_5
    DOI: 10.1007/978-1-349-05730-6_5
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-1-349-05730-6_5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.