文档介绍：An Empirical Model
of the Investment–Finance Link
and Implications for Public Policy
David Carrier, .
University of Notre Dame
preliminary draft
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ABSTRACT: Investment is the primary engine of growth in capitalist economic systems. Investment in plant and equipment leads to growth in output and employment, which results in a higher level of e that is respent by consumers, further boosting demand. The propensity to invest is determined by the expected profit generating potential of an investment, which depends on anticipated future revenues, so that profits, investment, and output form a cumulative loop that feeds on expectations and their fulfillment.
Firms rely on external sources of financing, and consequently investment is affected not only by their own financial condition, but also by that of the banking system and financial markets. Since investment is the foundation supporting every ponent of the ary economy, understanding the cumulative nature of the finance–investment cycle is crucial to correcting the underlying weakness of capitalist economies– the periodic inadequacy of aggregate demand to generate sufficient employment and e to meet basic needs.
The empirical model presented here demonstrates the intimate connection between conditions in financial markets and investment behavior in the postwar . economy. The policy implications that follow from this are clear: to be effective, policy must address risk and uncertainty in capital markets, and attempt to reduce price volatility. The events of 2008 have demonstrated that it is no longer adequate to rely entirely on regulation of financial institutions. Effective policy must do everything possible to reduce or mitigate systemic risk.
Keynes suggested that the best way to mitigate systemic risk is through a tax on transactions in financial markets. The tax could be graduated to mat