Portfolio Choice, Investment, and Growth.

This article focuses on the model of growth in which the level of investment is determined jointly by the interaction of the stock of capital, its demand and the flow supply of investment goods in the U.S. To derive a marginal efficiency of investment schedule from a firms' profit maximizing behavior have relied largely on the assumption that there are costs to adjusting the actual to the desired stock of capital at a fast rate. It is believe that the model of investment corresponds quite closely to Keynes' vision of the investment process. When the price of capital goods is high, the level of investment is also high, if the price of capital is low, investment is also low. The simplest notion is the demand for capital services. The demand for capital is distinct and quite different from the demand for capital services.