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Quote by: steve Economies aren't fueled by consumption - consumption is burning the fuel - production is what fuels the economy. Of course you want to produce things that will be utilized though but what really fuels the economy are capital investments and other beneficial forms of savings. |
some people, like myself, include capital investments as being part of the broad term - consumption. there is a real term in economics called "capital consumption"..
also, there's evidence that increases in consuming goods & services tends to correlate with increases in investment. and since the two are so closely related, economists have constantly had to play the chicken and egg game - e.g. what fuels growth? consumption or investment?
i tend to believe that investment is what starts growth at the outset, but once things get rolling, future growth depends on consumption.