Page 120 - Azerbaijan State University of Economics

THE PUBLIC INVESTMENTS IN AZERBAIJAN: THEORETICAL AND PRACTICAL ASPECTS

their best in order to eliminate these inconsistencies in their legislative

acts, statistical statements and budgets.
From micro-economic point of view investments is a capital

expenditure made by the economic entities in order to obtain the revenue
(income) or satisfy social demand [Law in Investment activity, 1995: article

1]. The timing is one of the most important factors influencing the

investments. From this point of view, during investment activity investor
loses the control over the some particular funds in order to earn revenue

(income) or satisfy social demand. As a result from micro-economic point
of view investment is expenditure of some funds for maintaining or increase

of positive value of the funds throughout the duration of the project. On

other hand, resale of the goods and other items between the economic
entities cannot be considered as investment. From macro-economic point of

view investment category includes capital expenditures, construction works
and investment into the increase in reserves [Albegova and others, 1998:

214]. Macroeconomists consider investments as funds directed creation of
new capital [Nicholas Gregory Mankiw, 1994: 120]. From this point of

view investments made on the individual basis are not accounted as

investment category in the macro-economic level.
Considering all above mentioned point we conclude that public

investment can be identified both on macro and microeconomic level.
Thus governmental authorities are considered to one of the institutional

structures of the economy. In case when investments are done in
intergovernmental level it can be considered as investment on

macroeconomic level and not considered as investment on macro-

economic level. Due to this fact the volume of public investment should
be identified based on both national accounts system and budgetary

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