英文教学课件PPT Investment__投资.pptVIP

Investment In this chapter, you will learn… leading theories to explain each type of investment why investment is negatively related to the interest rate things that shift the investment function why investment rises during booms and falls during recessions Three types of investment Business fixed investment:businesses’ spending on equipment and structures for use in production. Residential investment:purchases of new housing units (either by occupants or landlords). Inventory investment:the value of the change in inventories of finished goods, materials and supplies, and work in progress. U.S. investment and its components Understanding business fixed investment The standard model of business fixed investment: the neoclassical model of investment Shows how investment depends on MPK interest rate tax rules affecting firms Two types of firms For simplicity, assume two types of firms: 1. Production firms rent the capital they use to produce goods and services. 2. Rental firms own capital, rent it to production firms. The capital rental market Factors that affect the rental price Rental firms’ investment decisions Rental firms invest in new capital when the benefit of doing so exceeds the cost. The benefit (per unit capital): R/P, the income that rental firms earn from renting the unit of capital to production firms. The cost of capital Components of the cost of capital: interest cost: i ?PK, where PK = nominal price of capital depreciation cost: ? ?PK, where ? = rate of depreciation capital loss: ? ?PK  (a capital gain, ?PK 0, reduces cost of K ) The total cost of capital is the sum of these three parts: The cost of capital Example: car rental company (capital: cars) Suppose PK = $10,000, i = 0.10, ? = 0.20,  and ?PK/PK = 0.06 The cost of capital For simplicity, assume ?PK/PK = ?. Then, the nominal cost of capital equals PK(i + ? ? ?) = PK(r +? ) and the real cost of capital equals The rental firm’s profit rate A firm’