Accession Number : AD0604805

Title :   A MACRO INVESTMENT MODEL FOR MANUFACTURING,

Corporate Author : RAND CORP SANTA MONICA CALIF

Personal Author(s) : Niedercorn,John H.

Report Date : OCT 1961

Pagination or Media Count : 24

Abstract : This article presents the derivation, statistical testing and evaluation of a new investment model for investment in manufacturing industries. It is called an evolutionary model because it is based on some fundamental assumptions about the evaluation of the economy over time. With the help of a few additional assumptions two macro investment functions are deduced from the model. They show that aggregate investment depends on the rate of growth of total output, the gap between desired and actual capital stock, and a change in profit variable to show the state of short run expectations. Statistical testing of the two investment functions on data for investment in plant and equipment in manu facturing is favorable. Unfortunately, the statistical fit of the model is unsatisfactory when tested on data for aggregate investment in plant and equipment in all industries. This result seems to indicate that investment in plant and equipment in all industries is too highly aggregated a concept to analyze with a single investment function. (Author)

Descriptors :   (*INDUSTRIAL PRODUCTION, MATHEMATICAL MODELS), (*ECONOMICS, MATHEMATICAL MODELS), (*MATHEMATICAL MODELS, ECONOMICS), BANKING, MONEY, COMMERCE, INDUSTRIES, FUNCTIONS(MATHEMATICS), STATISTICAL ANALYSIS

Distribution Statement : APPROVED FOR PUBLIC RELEASE