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Questions tagged [investment]

Regarding the purchasing of capital and productive materials by firms. this differs from saving which is a similar action done by consumers.

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6 votes
1 answer
79 views

Is over-valuation of a start up genuinely detrimental to the start up's future?

I recently watched S02E01 of Silicon Valley. In it, having demonstrated a breakthrough algorithm, the guys are pursued by investors with increasing funding offers. However, the founder is warned ...
dwjohnston's user avatar
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9 votes
3 answers
615 views

Which capital accumulation is right? $K_t = (1-\delta)K_{t-1} +I_t$ or $K_t = (1-\delta)K_{t-1}+I_{t-1}$?

In a lot of models with capital, I find different variants of capital accumulation formula as follows: $K_t = (1-\delta)K_{t-1} +I_t$ or $K_t = (1-\delta)K_{t-1}+I_{t-1}$ Which one is more ...
capkital's user avatar
6 votes
3 answers
13k views

Why do we consider purchase of house by households as investment?

According to what I have read, investment is the expenditure on creation of capital goods, which means that it is done by producers. Then why do we treat buying of house by households as investment ...
Jonathann's user avatar
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4 votes
3 answers
249 views

How do government purchases crowd out the private sector?

I am curious about how government purchases crowd out the private sector (if it does). If we look at a graph of the composition of US GDP, it seems that government purchases and investment are ...
Vasting's user avatar
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3 votes
3 answers
550 views

Screw foreign investment, lets just print money

We often hear of countries securing foreign investment. Stores like this are trumped as major achievements. Foreign investment also has criticisms - profits generated in a country end up going abroad, ...
paj28's user avatar
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3 votes
1 answer
146 views

What is the effect of redirecting government tax intake to a consumer retirement saving incentive?

In New Zealand we have a retirement saving scheme called Kiwisaver. The scheme is opt in. If a consumer opts in, they must save at least 3% of their income, which they can't access until retirement. ...
dwjohnston's user avatar
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3 votes
2 answers
259 views

Savings = investment with private money creation?

I've been reading some introductory macroeconomics and I'm struggling to understand one of the basic accounting identities. In a closed economy with a fixed money supply it's clear that every dollar ...
Simon Lyons's user avatar
1 vote
1 answer
86 views

Why a new startup should ask a big investment company to value them as low as possible? [duplicate]

In "Silicon Valley TV Series" (in first episode of the second season) a bunch of guys, designed a new algorithm, and asked big companies to invest in that project and value their product. At a ...
Milad R's user avatar
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