Lecture 20- 11-15-10

Lecture 20- 11-15-10 - 11/15/10 Lecture 20: Investment and...

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11/15/10 Lecture 20: Investment and Finance Lecture Outline Foreign Direct Investment- investment in long term foreign investment o Like farms, factories o More personal You are involved abroad, getting into society and the culture of that country Not as easily liquidities o You cannot as easily sell this factory o Investment in production involves long-term investments Portfolio Investments o Short term flows Includes all other capital Stocks, bonds, certificates of deposit Financial instruments derived from above mentioned things o Often short term but can be long term like 30 year bonds o Short term because it can be liquidated very quickly Short term= anything under 1 year Currencies Financial Markets and Crises o Capital markets have not been open until 70’s which is quite recently Foreign Direct Investment
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Resource investment (realist zero sum?) o Who gets what? o How are spoils broken down Manufacturing investments (Liberal product life cycle?) o Comparative advantage was theory known as product life cycle theory o Product Life Cycle Theory- when you develop a new investment especially new product in manufacturing you first develop at home where you have 1 st stage- product for home market 2 nd stage- product matures (standardized, figure out what people want, you are satisfied with qualitity) Want to lower cost of input in making the product
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Lecture 20- 11-15-10 - 11/15/10 Lecture 20: Investment and...

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