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Investment in Gold reduces supply of money needed for accelation in economic growth. To that extent that affects growth of GDP.

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Investment in Gold reduces supply of money needed for accelation in economic growth. To that extent that affects growth of GDP.

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R. M. Sundrum has written:

'Instability of public sector investment'

'Savings, investment, and economic growth'

'Growth and development'

'Economic growth in theory and practice' -- subject(s): Classical school of economics, Economic development, Keynesian economics

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Increased savings affects economic growth primary by changing the future level of savings with respect to investment. Since savings is matched to investment and investment is used to replace and purchase capital, future investment will determine the respective level of capital development. Economic growth, being a function of the factors of production, including capital, will be changed by increased savings by having a higher level of future capital. Moreover, increasing savings can increase or decrease future economic growth, depending on the difference between current investment and required investment. When current investment falls below required investment, future economic growth increases due to a savings increase and vice-versa. Decreasing growth is possible because factors of production have diminishing returns to scale, which means that increasing levels of capital have lower returns to productivity than previous units.

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It helps increase productivity

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Rise in investment in a country eventually leads to the rise in economy.

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