"Do interest rates have an important negative influence on investment expenditure?"
             3. Relation of the interest rate to the investment expenditure
             Generally as investment we mean expenditure on durable goods or technology designed to increase or maintain the productive capacity of a firm. Investment is always an expenditure on capital goods. Also, in macroeconomics, investment is the expenditure for the creation of new capital. We cannot call investment a purchase that aims only to reallocate existing capital.
             In the National Accounts we calculate in the sum of total investment expenditure an amount called residential investment. Residential investment is not made by firms, but by households on housing It is calculated as returning imputed rents to the owners in payment for providing the services of a place to live and in this sense it is computed as gross investment. This is also the case for people who buy houses for themselves and not in order to rent them to others. Nevertheless, this kind of investment has different motivation than the expenditure on means of production made by firms, and it is excluded from our focus. We will keep the analysis in this essay solely on investment expenditure made by firms or, as we can call it, non-residential investment.
             In examining non-residential investment we can identify three types of investment expenditure: replacement investment, net investment and inventory investment.
             As replacement investment we identify the expenditure made to replace existing means of production, in order to maintain, and not to increase, productive capacity. Means of production depreciate for various reasons: either because of use, i.e. they wear out, either because they become technologically uncompetitive, i.e. technological advance makes them outdated, or for other reasons (for example, changes in product qualifications made by authorities). Replacement investment is computed as a standard in...