Macroeconomic Perspective and Fundamentals of Investment Behaviours

Abstract

Generally non-economists and the rest of the world consider investment as the act of buying financial assets such shares, stocks, bonds and other securities which already exist in the stock market. But this description only limits investment to a transfer of existing stock of assets which does not affect aggregate spending. It does not culminate into real investment either. This paper therefore discusses the macroeconomic perspective of investment and some of the fundamentals of investment behaviour. The paper discusses the meaning of investment and other conceptual issues as well as the different types of investment. Section three explains investment function while section four discusses the determinants of investment. Section five, which is the last section reviews the different investment theories and then concludes.