. New Investments
New investments can be defined as
that part of the new product (or a new
social product), which is in the process
of its final allocation used for the
construction of new fixed assets.
Economic category of the new product
can be defined as a social product that is
not reduced by the full amount of
depreciation, but only for the size of the
replacement. In other words, the new
product could be defined as the portion
of gross domestic product or the social
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product which is in the process of its
final allocation as a whole can be used
for consumption, and that while fully
preserving the value of existing fixed
assets. Sources of financing new
investments are liquid distribution of
national income (the amount of net
investment) and accumulative part of
depreciation or amortization of the
excess replacement. This means that the
new investment (the same as net
investment) homogeneous category, and
that in general a factor accumulation and
expanded reproduction. Cumulative new
investment gives the gross value of fixed
assets. In that values the principle
expressed in the physical volume of
production capacity contained in a
certain group of fixed assets. Activated
new investments, therefore, are the best
indicator of growth or decline of
production capacity contained in the
fixed fund. The relationship between
new investment and new product called
the rate of new investment.
Since we are in the economic analysis
and development planning are most
interested in those investments that are
in the functional interdependence with
the increase in production capacity and
production, new investments, as suitable
measures of growth, are unusually
important instrument of economic
analysis and planning. Due to the fact
that in its economic-analytical character
a homogenous macroeconomic category
(in terms of economic growth and
expanded social reproduction), new
investment can be positive, negative or
zero. When the gross investment
increased by substitution, then the new
investment is positive.
When the gross investment of equal
replacement, then the new investments
are equal to zero. When the gross
investment less than replacement, then
the new investment negative.
Conclusion
Economic growth is the continuing
increase in the volume of production in
one country, ie. GDP growth, while
economic development is not only
quantitative but also qualitative changes
that lead to better meet their needs.
Economic development is associated
with the accumulation of capital, ie. with
investments. Under the capital we mean
permanent production goods that serve
as a work tool in the production of other
goods. Under the concept of investment
we mean investing in fixed and
revolving funds, that is. the part of the
social product that is not spent, but it is
used for replacement and construction of
new capacity.
Investments are divided in different
ways according to purpose, according to
their technical structure and according to
the criteria of funding sources.
According to the purpose, the most
important is the division into fixed
investments and investments in
revolving funds. According to the
criterion of sources of financing those
investments that are financed from the
current distribution of national income
categorize as net investments, and those
investments that are financed from the
current distribution of national income
and the corresponding depreciation from
gross investment funds call. The third
macro-economic categories of
investment are new investments, which
are located between the size of gross and
net investment. When the accumulation
of greater investment over saving than
investing, and when the accumulation
less than an investment, the more it
consumes, which initiates an increase in
production, employment and capacity.
