Capital Formation Theory And Measure Methods

The theory and measurement of capital formation is an important field in economics, and also a subject stimulating challenge and argument. This thesis is Base on the expanding reproduction theory of Marxism and the assumption of economic behavior, analyzes the regularities in the process from saving to investment and economic growth mainly from the point of view of positive analysis, and conducts systematic research on the measurement of capital formation.In the first place, the thesis reviews briefly the academic history of capital formation theory and measurement of Max and western economists, summarizes the development of the research on productivity and capital theory in China, and presents the importance of developing capital theory and establishing capital market and the role which capital formation plays in the economic growth. Secondly, the thesis analyzes the mechanism of transference of saving to investment. Based on the assumption of maximization of personal utility, maximization of enterprise's profit and public policies, it analyzes the sources of capital formation, such as resident saving, enterprise saving, government saving and capital inflow and outflow etc., and the process from saving to investment, such as, resident investment, enterprise investment and government investment etc. and also analyzes the intermediate role of financial system in the saving and investment process. The results show that, in China, during 1980s, Governments are the leading savers and investors, but during 1990s, enterprises become the main savers and investors, the residents become dominant saving plus units and enterprises become dominant saving deficit units. Thus, only the establishment of healthy and market-orientated financial system can guarantee the efficient transformation of saving to investment. In Chapter 4 and 5, the thesis analyzes the capital formation mechanism both in the points of views of micro economy and macro economy. On the micro economy, the paper combines the capital budget method, that is technical economic evaluation method, with modern enterprise theory, draws the conclusion that net present value method is the mot appropriate method in capital budget, and present the determinant factors of enterprise investment. On the macro economy, the paper researches on the how the total fixed asset investment is determined, and what is the relationship between capital formation, economic growth and technical improvement. Chapter 5 discusses the methodology of measuring capital formation, such as permanent inventory method, the method of user's cost of capital, and the method of expected income etc. and show how to measure the value of capital wealth, capital depreciation rate, capital rental price, index of capital input and how to apply the methods to National Income Account and financial market. In the end, Chapter 6 analyze the finance and investment policies in China, the achievement and problems of capital market-orientated reform, and proposes some policy suggestions on the reform of finance and investment system, such as: realize the market determined interest rate; reduce the entry barrel of private banks; establish normal taxation system; enforce financial real name system and thus create the basis of personal credit; protect private property, establish and improve the property market; and etc..The emphases which are pursued in the paper is to try to make the capital formation theory and measurement methodology consistent between micro and macro dimensions, combine the measurement of capital formation with the transactions of goods market and financial market, and combine the technical economic evaluation methods with modern enterprise theory and presentsystematical and consistent method of capital formation measurement. Of course, many contents still need to be developed and many worb need to be continued, for examples, empirically analyze the enterprise investment behavior of China, especially that of those companies listed in Security Markets; by using the method, set...