I guess if you invest, you slightly increase the availability of funds for businesses, which slightly grows the economy. And presumably, this slightly increases wealth in your country, in a way that persists over time with usual growth rates. Most investments are probably pretty replaceable though.
Most investments are probably pretty replaceable though.
By this, do you just mean that the selection of one investment over another usually doesn’t matter? Or are you saying overall investment is replaceable in some way, i.e. my increased investment can lead to someone else investing less?
What I had in mind was the latter. My intuitions clearly point that way in a smaller pool of investment. Take venture capital. If you add $1m of funding, then the low hanging fruit might already be picked, and so you go broke. Alternatively, the other companies will run out of promising startups to fund, and will pull some of their money. Probably, the same thing would happen on a larger scale with the entire US economy.
On the other hand, if the startup is one that wasn’t able to get funding elsewhere, then your contribution is truly irreplaceable.
I guess if you invest, you slightly increase the availability of funds for businesses, which slightly grows the economy. And presumably, this slightly increases wealth in your country, in a way that persists over time with usual growth rates. Most investments are probably pretty replaceable though.
By this, do you just mean that the selection of one investment over another usually doesn’t matter? Or are you saying overall investment is replaceable in some way, i.e. my increased investment can lead to someone else investing less?
What I had in mind was the latter. My intuitions clearly point that way in a smaller pool of investment. Take venture capital. If you add $1m of funding, then the low hanging fruit might already be picked, and so you go broke. Alternatively, the other companies will run out of promising startups to fund, and will pull some of their money. Probably, the same thing would happen on a larger scale with the entire US economy.
On the other hand, if the startup is one that wasn’t able to get funding elsewhere, then your contribution is truly irreplaceable.
I’m no economist though.