The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Investment (Neoclassical)

  • Robert M. Coen
  • Robert Eisner
Reference work entry


Investment is capital formation – the acquisition or creation of resources to be used in production. As such, it captures the production side of intertemporal consumption/ savings decisions. This entry focuses on neoclassical approaches to the study of investment. Theoretical and empirical issues are discussed.


Acceleration principle Adjustment costs Capital–output ratio CES production function Depreciation Distributed lags Elasticity of substitution Euler equations Full employment Human capital Investment (Keynesian) Investment (neoclassical) Irreversible investment Opportunity cost of capital Public capital Saving and investment User cost of capital 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Robert M. Coen
    • 1
  • Robert Eisner
    • 1
  1. 1.