ISBN:
0444861270
Content:
This chapter describes investment theory as the study of the individual behavior of households and economic organizations in the allocation of their resources to the available investment opportunities. For the purposes of investment theory, economic organizations are characterized as being members of one of two groups: business firms that hold as assets the physical means of production for the economy and finance their production decisions by issuing financial claims or securities and financial intermediaries that hold financial claims as assets and finance these assets by issuing securities. Individuals or households are assumed to invest primarily in securities and, therefore, invest only indirectly in physical assets. The markets in which these securities are traded are called the capital markets. The natural starting point for the development of investment theory is to derive the investment behavior of individuals. It is traditional in economic theory to take the existence of households and their tastes as exogenous to the theory. However, this tradition does not extend to economic organizations and institutions. They are regarded as existing primarily because of the functions they serve instead of functioning primarily because they exist.
In:
Handbook of mathematical economics, Amsterdam : North-Holland Pub. Co, 1982, (1982), Seite 601-669, 0444861270
In:
9780444861276
In:
year:1982
In:
pages:601-669
Language:
English
DOI:
10.1016/S1573-4382(82)02008-6
URL:
Volltext
(Deutschlandweit zugänglich)
