The Divine Effect.
At 17:44 23/08/2005, you wrote:
all sorts of things typically rise with GDP, including business
optimism, profitability, cash flow, the ratio of business income to
debt, the ratio of sales to industrial capacity, and the degree of
uncertainty. All else constant, the combination of these rises
encourages fixed business investment to rise. What should I call this
connection?
Currently, in the textbook I'm helping to write, I call this the
"prosperity effect" on fixed investment. Is there a better name that
anyone can think of? (I used to call it the "accelerator effect," but
that gets confused with the accelerator theory.)
--
Jim Devine
"living a life of quiet desperation -- but always with style!"
Michael A. Lebowitz
Professor Emeritus
Economics Department
Simon Fraser University
Burnaby, B.C., Canada V5A 1S6
Currently based in Venezuela. Can be reached at
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Departamento 601
Parque Central, Zona Postal 1010, Oficina 1
Caracas, Venezuela
(58-212) 573-4111
fax: (58-212) 573-7724
