Q-THEORY OF INVESTMENT
Originally developed by Nobel laureate, James Tobin of Yale University
Theory states that investment spending increases when stock prices are high
If stock prices are high, it can issue new shares of its stock at an advantageous price and use the proceeds to undertake new investment
Recent research has shown a close connection between Q-theory and neoclassical theory and highlighted the key role that real interest rates and taxes play in the Q-theory as well