CYCLE AND REPLACEMENT

CYCLE AND REPLACEMENT

The article raises the problem how the growing demand or replacement affects the stability of investment. The question is topical because depreciation within gross investment has become preponderant in the Hungarian economy in the eighties. The authors prove that in the case of a stern-heavy distrib...

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Bibliographic Details
Published in:Acta oeconomica Vol. 39; no. 3/4; pp. 325 - 340
Main Authors: KOVÁCS, J., TARJÁN, T.
Format: Journal Article
Language:English
Published: Budapest Akadémiai Kiadó 01-01-1988
Subjects:
Coefficients
Economic fluctuations
Economic investment
Economic models
Financial investments
Investment value
Mathematical models
Necessary conditions
Polynomials
Resultants
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Summary:The article raises the problem how the growing demand or replacement affects the stability of investment. The question is topical because depreciation within gross investment has become preponderant in the Hungarian economy in the eighties. The authors prove that in the case of a stern-heavy distribution of investment, when the bulk of investment projects are realized towards the end of the investment period, this surely takes place along an unstable path, while the fact that the distribution of investment is stem-heavy, that is, the projects are implemented in bulk in the first half of the period, is only a necessary but insufficient condition of the stability of the investment path. The growth of replacements makes the investment path unstable sooner or later. Presumably, this also has unfavourable impacts on the growth path itself.
ISSN:0001-6373
1588-2659