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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How exactly do Participatory Notes induce volatility into the economy?
I was reading up on participatory notes. Wikipedia defines these as "instruments issued by registered foreign institutional investors (FII) to overseas investors, who wish to invest in the Indian ...
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Are that models that explain how companies become more efficient?
I'm trying to model/understand the following intuition:
Company makes a product
Product gets sold, company makes a profit
Company does something with the profit to become "better" at what they do: ...
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Optimisation of bonds
I'm doing an optimisation problem but don't understand what the terms mean.
Suppose someone wants to invest $110,000.
They have 4 choices as to what they invest their money into:
municipal bond ...
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Does the federal reserve create any type of deadweight/welfare loss?
In microeconomics, we learn that when a good is overproduced or under produced, there is a dead weight loss associated with it. It seems like the same concept would apply to macroeconomics, where the ...
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How much precious metals prices come from their use as investement vs practical use
Some precious metal price come almost exclusively from their value as an investement, as gold, while some others like palladium or osmium have important uses in industries. But lately those metals ...
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Testing Tobin's q theory predictions
I'm reading this great intermediate level macroeconomic book by Carlin and Soskice, and on page 31, when discussing the empirical studies testing the Tobin's q theory to explain the behaviour of ...
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Saving equals investment according to Keynes
In "The General Theory of Employment, Interest and Money", Chapter 6 The Definition of Income Saving and Investment, John Maynard Keynes says:
Income = value of output = consumption + ...
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How will market self-correct so that passive investing never becomes 100 %?
The premise of the paper titled The Arithmetic of Active Management by Sharpe is that active managers as a group have to necessarily underperform passive managers as a group because passive investors ...
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Implications for the economics literature of possible mistakes in Black-Scholes-Merton option pricing?
If this preprint (which is discussed here on QSE) is correct in showing that there are mathematical mistakes in the Black-Scholes-Merton option pricing framework, are there strands of the economic ...
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Does discount rate and cost of capital mean the same thing to compute levelised cost of energy (LCOE)?
I came to understand that cost of capital and discount rate are two different parameters, although they are also used ...
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Understanding Minsky’s framework for rate transmission
Relevant except from Hyman Minsky:
Although present value reversals occur-they certainly did in the 193Os
and again to a much more limited extent in 1974-75 and 1981-82-the
cyclical contractions and ...
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The case where the entire amount of investment goods are supplied by the imports
A positive investment multiplier does not exist in an open economy simple Keynesian
model when the entire amount of investment goods is supplied from import. Examine
the validity of this statement.
My ...
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Differences between stocks and bonds
I just learned what bonds are. They seem similar to stocks, but different in key ways. I'd like to know all the ways. I'll list the differences that I currently believe they have. The only reason I'm ...
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Information Asymmetry in capital markets: EU ad-hoc announcements/8-K filings in other countries
In many countries, companies whose securities are traded on a stock exchange are subject to an ad-hoc disclosure requirement. This ad-hoc announcement publication duty refers to the obligation to ...
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Productive and Non-productive investment
What is the exact difference between Productive and non-productive investment? There is no hard and fast distinction that I could find. Additionally, Is it correct for me to label non-productive ...
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GFCF/GPDI in Real GDP Calculations
I'm trying to understand how GPDI / GFCF are used in the real GDP calculations (when compared to net investment). In both the US / Denmark, the real GDP numbers seem to directly GPDI / GFCF without ...
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Is there contradiction between ''job creation" and "growth" as implemented by automation?
Joint goals of job creation and sustainable growth are the main goals of majority of EU funding schemes. E.g. European Innovation Institute explicitly states in its mission https://eit.europa.eu/who-...
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Link between recession and decline in investments
I recently followed MIT online lectures for economy and I found this - one of the reason for investments decline in recession is bad expectations about economy -----> leading to Higher capital output ...
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Investments during recession
During Recession, banks loans decrease which leads to financial constraints and ultimately Investment suffers and declines.
my question is - "Are loans lower because of demand or supply?"
My ...
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Are corporate savings deflationary?
Example: Apple. People "overpay" for their products, money that ends up in corporate savings and not in their competitors' coffers, sort of a black hole because Apple doesn't see enough investment ...
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Is FDI the principal route for funds directed offshore to return to a country?
Is foreign direct investment the principal route for funds directed offshore to return to a country?
For example, the UK has perpetual trade deficit. But the sterling sent overseas must make its way ...
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Estimation of investment adjustment costs
Hi I am working on a problem set in my macroeconomics course. I have a hard time figuring out how to get started on one of the problems.
The set-up is the following. A price-taking firm maximizes:
$\...
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Is the definition of Investment variable in Economics?
I studied that Investment is the expenditure incurred on the procurement of such goods that would help us in production of goods and services.
And mainly consists of Fixed and Inventory Investment
...
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What is the Canonical Metric for Investment? (U.S.)
I'm currently taking a run-of-the-mill Intermediate Macro class and have coursework which asks to produce a vis that tracks U.S. Investment from 1970-2014. What is the salient/canonical National ...
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Concept of return on investment but for the state instead a firm
So, following a discussion I had today, I have the following question.
If we use the return on investment (ROI) to describe the gain of an investment is there a similar concept not for a company but ...
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Best strategy for investing and buying out property with many owners(20+)
First I am not economist, so sory if I am not using economicaly correct language. But this is a real life situation.
I would like to know what are the buy out strategies for investor when he has to ...
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How can I change this formula to better calculate the reward of some financial movements? (avoiding to consider maturation)
I am here to ask you a suggestion about how to correctly handle this situation related to how to calculate the earned money into an financial investment.
Here you can find a basic Excel sheet related ...
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Monthly savings plans
Monthly savings plans in stocks or funds are typical investments for many people. On aggregate, these plans generate a large demand on the underlying assets, often around the end/beginning of a month.
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Foreign investment with US equity; typical expected rate of return?
I have been trying to answer this question but cannot find a suitable dataset or compilation.
When a US investor invests in a non-US project what are typical rates of return he is looking for?
I do ...
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Evaluating the return of a trading strategy on forex markets
Which measure should I use to evaluate the returns generated with a trading strategy based on announcements of macro-economic news on forex markets.
I thought about the Sharpe-ratio, however I do not ...
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Calculating Annualized Average Return
I am currently working on a problem set in a book that asks me to compute the annualized average return for a portfolio, benchmark, and then the relative return from the annual returns reported. I ...
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loanable funds theory: why is the supply of loanable funds equal to saving (+ dishoarding + new money)?
It seems that the loanable funds theory suggests that all that is saved is supplied in the market for loanable funds. This makes sense when we are talking about 'household saving' (i.e. household ...
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How Marxian economists evaluate current and future technologies for making investment decisions?
Current Marxian economists are incredibly vague about the merits of technologies and about concrete investment decisions, at least, the Western Marxian economists are.
E.g. there is book https://www....
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Future value of a "future" investment
Consider the following well-known simple exercise :
You have a loan outstanding. It requires making three annual payments
at the end of the next three years of $1,000 each. Your bank has
offered to ...
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Which economic model and variables should I use to investigate the impact of sentimental shocks in central bank statements on investment?
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I am currently working on a research project that aims to investigate the impact of sentimental shocks in central bank statements on investment in the economy. I am looking for guidance on selecting ...
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Accounting for inflation when calculating the discount rate
Good afternoon! I am evaluating an investment project and I want to calculate the discount rate based on a risk-adjusted method.
Calculation formula: discount rate = risk-free rate + risk adjustment + ...
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What should policymakers do to increase national savings rate of a developing economy to decrease risk of volatility in ER due to withdrawl of FPIs?
Case in point is a developing country who find it's domestic savings insufficient and in turn depends on Foreign portfolio investment to increase it's productivity, wages and drive it's economic ...
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Additivity of the Fisher price index for the same component
I have a dataset of yearly gross investment since 1970 in chained 2010-prices or "Fisher index prices". I want to depreciate each year's investment and add them up, however, reading about ...
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CDOs, Synthetic CDOs and 2008 financial crisis
I have recently been researching about the 2008 financial crisis and after hours of reading, I have been left with some gaps in my understanding of the events that lef to the collapse of the market in ...
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How many hedge funds are there?
For personal interest. This 2022 special report on hedgeweek.com says,
Cayman is domicile to over 23,000 CIVs, including about 80% of all international hedge funds
which suggests a maximum global ...
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Do stock indexes (S&P 500, DJ, ...) directly depend on inflation?
I can't understand what stock indexes really are. What they are representing?
As far as I know, they represent relative change (in points) in the prices of shares of a given set of companies. Is that ...
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How are retail investors served on the primary market?
When a company issues new shares on the primary market, is it possible or even obligatory to reserve a given amount for retail investors?
If it is possible: How often is this done? (From Wikipedia I ...
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Why do we have *daily* series of T-bill yields?
I understand that each week the US Treasury issues new T-bills at different maturities (1-month, 3-months, 1-year, etc). As far as I understand, this issuance happens every Tuesday. After the auction, ...
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Perfectly functioning credit markets and consumer saving
Today in my Macroeconomics lecture, while covering the Real Intertemporal Model with Investment (Chapter 11 of Williamson's Macroeconomics), my professor proponed that a key assumption to not make ...
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How can I tell who are major investors in an asset management group and their associated funds?
I am trying to determine which individuals/organizations are the largest investors in Netflix, but when I look at the list of top shareholders, they are all investment management groups. Investment ...
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How does investment lead to generation of jobs?
I quote from India's Economic Survey 2019 (an official document) -
While the claim is often made that investment displaces jobs,
this remains true only when viewed within the silo of a specific ...
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Project Financing Evaluation and accounting
While evaluating the whole entrerprise value of Falck Renewables using the discounted cash flow method I end up with a negative continuing value and economic profit due to the negative spread between ...
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Private Investment Impact on Bond Yields
From Japan to the US to Germany, we are currently seeing longer term bond yields falling at an alarming rate.
I tune into a fair bit of economic commentary, and can often come to some sort of ...
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