New answers tagged investment
2
The term FDI is generally reserved for foreign capital investment in domestic assets of the host country for business interests as opposed to hot flows which are generally aimed for quick capital gains.
Examples of FDI would include take-overs of firms, collaboration/merger with a domestic company, entry into a new market, etc. Such investment give returns ...
0
It's very likely that the 30bn inflow from China is (roughly) equal and opposite to outflows of U.K. money to China. Put those together and the amount of money in the U.K. doesn't change. Hence very different than the BoE printing money.
1
Mortgage rate data: FRED page.
The mortgage rate did move at various points in 2008, so the premise that they did not change appears incorrect. However, I can answer how they are priced.
The easiest way to view mortgage rates is that they track the rates of mortgages traded in mortgage-backed securities. The fair value of their yields depend on the riskiness ...
3
By the way, after a house is built (whether it was built this year or many years ago) it does provide economic value. If renters live there, then the rent they pay is counted as a service in GDP. And if the home owners live there then the same thing happens, the government estimates the 'imputed rent' and that is counted in GDP.
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Purchasing new homes would count as an investment. According to Blanchard et al. Macroeconomics: a European Perspective pp 568 in glossary investment is defined:
Investment (I): Purchases of new houses and apartments by people, and purchases of new capital good (machines and plants) by firms.
The source above is the leading undergraduate macroeconomics ...
0
Foreign Institutional Investors (FII) and Foreign Portfolio Investors (FPI) can and do invest in government securities as well. There may be restrictions of course leading to imperfect capital mobility. For example in India, FIIs/FPIs cannot hold more than 6% of outstanding stocks of securities.
As interest rate increases (usually because of an external ...
0
Capital investment is generally considered a positive for the economy in which the investment takes place because it increases productivity (more goods or services per unit labor input). To use a simple example, if you had a factory of people who hand sew dresses and then made a capital investment to buy sewing machines, those same people when trained to ...
0
One thing that could be made more explicit is that the capital is presumably for export employment and the existence of these employees will require additional local employment. Export employment is a job that produces a product for outside the city, local employment produces a good/service internal to the city.
To use your example, if a car factory brings ...
-1
Does saving increase the supply of credit? Critique of loanable funds theory.
http://wer.worldeconomicsassociation.org/files/WEA-WER-4-Lindner.pdf
In the first step, the concepts of “saving” and “credit” will be clearly distinguished using simple accounting. It will be shown that credit is not limited by anybody’s saving and that no one has to abstain from ...
2
Just to add some more besides the answers above:
Short answer: by influencing interest rate.
Explanation:
In the post Keynesian literature what has come to be appreciated a lot is that government purchases, backed by increased government debt, increases interest rate. Why? Well, that's in itself an interesting explanation and perhaps should be a separate ...
1
No under expenditure approach neither salary or wages are directly counted. An expenditure approach to GDP calculates GDP as follows:
$$GDP=C+I+G+NX$$
Where $C$ is consumer spending on final goods and services at market prices, $I$ is the investment spending, $G$ is government spending and $NX$ are net exports.
All wages and salaries are of course indirectly ...
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