This book examines investment theory in the light of rational expectations and disequilibrium theory, the two major recent developments in macroeconomics. It employs a neoclassical framework to offer a remedy for the two primary shortcomings of modern investment theory: the almost exclusive focus on the demand side of the investment process; and the lack of any coherent general framework capable of handling the study of investment when it is recognized that the markets in which firms operate may not clear continuously.