Abstract
For the macro characteristic of active investment, we introduced the concept of the technical productivity of investment. It characterizes an investment’s capacity to reduce the norm of material or labor costs.Based on the technical productivity of investment, we derived the equation (not identity) of economic dynamics.We have proposed measuring the efficiency of investments by added-value to reflect their effectiveness for the business owner’s far-sighted interests in minimizing the turnover of skilled workers. We have proposed to use the criteria in terms of the state – the maximum of the real GDP growth and the maximum of the sum of real GDP for the country as a whole.We defined the limits of an investment’s technical productivity, for which the investor receives the desired payback or effectiveness, and an economy in maximal development.For this, we used our causal simulation model of Ukraine’s economy dynamics, which, in contrast to the known models, reflects the main types of legal and shadow economic activities in their relationships.
Highlights
The general pattern of changes in the sectoral structure of the world economy is a consistent transition from primary industries to secondary industries, and – to tertiary industries
The creators of economic dynamics, Robert Solow (1956) and Roy Harrod (1973) did not set themselves the task of creating such a characteristic. Because they considered capital growth, and it is due to investment, they eventually developed a macro characteristic of investment, albeit uninformative
We can adopt the straightforward methodology of our research: we study the Ukrainian economy dynamics over 5, 10, and 15 year cycles for different types of investment at different levels of their technical productivity and compare options
Summary
The general pattern of changes in the sectoral structure of the world economy is a consistent transition from primary industries (agriculture and mining) to secondary industries (manufacturing and construction), and – to tertiary industries (services). The share of high-level technologies remained virtually unchanged (about 32%), and the share of key technologies increased from 16.4 to 23.5% (World Economic, 2005) These structural changes undoubtedly affect Ukrainian exports, and since raw materials (ferrous metals, low-processing chemicals, agricultural goods) are its lion’s share, this impact is negative – Ukrainian exports are declining. The only way to increase exports is the way of the world’s leading countries – the development of science-intensive industries. This path will undoubtedly lead to a successful and sustainable development of the Ukrainian economy. This work is devoted to determining the conditions under which the investor will receive the expected return, the investment is efficient, and the country’s economy grows steadily
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