Is increased investment by firms the most important factor for increasing economic growth?

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Selected thesis

Increased investment by firms is the most important factor in achieving faster economic growth.

Pros

Cons

  • Pro claim 1

    Firms usually invest in ways that increase their efficiency. This produces a long-term growth trend.

  • Pro claim 2

    Investment demonstrates economic confidence, which increases growth.

  • Con claim 1

    Consumer spending has a greater impact on aggregate demand levels.

  • Con claim 2

    State investment in infrastructure is more important for continued, stable growth.