That Doesn’t Work Anymore

Chapter 25 Business Investment—What People Watch and Should Watch

Increases in business investment are generally viewed as a positive sign for the economy. Investments in human capital, out-sourcing partnerships, peer-to-peer businesses, and intellectual property are all less tangible and harder to track than many traditional business capital expenditures such as a physical plant or media content. These dynamics limit the usefulness of using traditional business investment figures as a measure of economic activity or potential future growth. In the United States, gross domestic product (GDP) report there is a break-out of “private nonresidential fixed investment,” which includes structures, equipment and intellectual property. This data can give ...