I read in Schweser (Study session 7) that says .. “If saving rate increases, economic growth increases as a greater supply of financial capital lowers real interest rates and increases the growth rate of physical capital.”
It sounds logical ..
However, if saving rate decreases, where does the money go? Let’s say if people are using their money on Investment or Spending instead, then I seem to remember somewhere in CFA curriculum that says it will promote economic growth also?
It sounds logical ..
However, if saving rate decreases, where does the money go? Let’s say if people are using their money on Investment or Spending instead, then I seem to remember somewhere in CFA curriculum that says it will promote economic growth also?