fixed investment


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Fixed-Income Security

A security with a guaranteed return. Common examples include bonds, which pay periodic coupons representing a certain interest rate, and preferred stocks, which are legally required to receive a specified dividend at certain times. Typically, fixed-income securities offer lower risk and lower returns than common stock and similar investment vehicles.

fixed investment

any INVESTMENT in plant, machinery, equipment and other durable CAPITAL GOODS. Fixed investment in the provision of social products like roads, hospitals and schools is undertaken by central and local government as part of government expenditure. Fixed investment in plant, equipment and machinery in the private sector will be influenced by the expected returns on such investments and the cost of capital needed to finance planned investments.

Investment is a component of AGGREGATE DEMAND and so affects the level of economic activity in the short run, while fixed investment serves to add to the economic INFRASTRUCTURE and raises POTENTIAL GROSS NATIONAL PRODUCT over the longer term.

In the short run, expected returns from an investment in plant will depend upon business confidence about sales prospects and therefore plant utilization. The volatility of business EXPECTATIONS means that planned levels of investment can vary significantly over time, leading to large changes in the demand for capital goods (see ACCELERATOR), i.e. large fluctuations in the investment component of aggregate demand leading to larger fluctuations in output and employment through the MULTIPLIER effect. See BUSINESS CYCLE, INVENTORY INVESTMENT, MARGINAL EFFICIENCY OF CAPITAL/INVESTMENT.

References in periodicals archive ?
Real Private Fixed Investment by Type, Quantity Indexes
The private sector showed positive signs in FY17 as the borrowing for fixed investment rose to 365.9bn and was anticipated as the beginning of a healthy growth trajectory.
The fixed investment has increased to Rs 4,517 billion as compared to Rs 4,061 billion last year, recording growth of 11.23 per cent.
A little over a year ago in these pages we documented the sluggish recovery of private fixed investment since the end of the recession.
It added that the increase in real GDP in the third quarter primarily reflected "positive contributions from private inventory investment, personal consumption expenditures (PCE), exports, nonresidential fixed investment, residential fixed investment, and state and local government spending that were partly offset by a negative contribution from federal government spending.
Specifically, the increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures, private inventory investment, nonresidential fixed investment, exports, and federal government spending that were partly offset by a negative contribution from residential fixed investment.
In the current crisis, Russia has suffered a major slump in fixed investment levels, with total 2009 investment volumes falling to 2007 levels.
Factors contributing to the decrease in real GDP for the second quarter were primarily negative output in various categories including private inventory investment, nonresidential fixed investment, residential fixed investment, personal consumption expenditures, and exports.
One example is the industry-wide transfer of fixed investment from the automakers to the suppliers.
The purpose of this study is to analyse the determinants of private fixed investment spending in Turkey over the period 1970-96, which covers years of both financial repression and financial liberalisation.
This distinction is of special importance in identifying the cyclical roles of the two components of fixed investment: nonresidential (business) fixed investment and residential fixed investment.
1 Private fixed investment 105.269 105.852 106.395 106.714