What relationship would economic theory suggest exists between investment and economic growth?
Investment is fundamental to economic growth. Basic family farmer planting seeds to cultivate in expectation of harvest is investment in potential production. There is risk of crop failure and other perils. Generally the agricultural production is the guide to all other forms of investment and hence economic growth. All production beyond subsistence offers the potential to satisfy demands for items not available on the farm and accumulate wealth and security against adverse circumstance. Excess production beyond subsistence is exchanged for value in other divisions of labor.
