How do I simulate investment using the investment spending and capital stock variables?
To model new investment by businesses or households, you must generally use both the Investment Spending and Capital Stock variables in tandem. First, enter the amount as Investment Spending, which stimulates expansion of output by businesses, leading to growth in employment, wages, and other economic indicators. If the spending occurs over several years, enter each year’s portion into the appropriate year; however, once the spending ceases, do not continue to enter positive values into subsequent years. The amount of residential or non-residential investment spending you entered will automatically be added to Capital Stock. If the value of the new structure you are simulating is more or less than the sum of the amounts you entered as residential or non-residential investment spending, then you should adjust the Residential or Non-Residential Capital Stock policy variables accordingly. If any of the structure investment was entered as a construction policy variable (either sales or emp
