ABSTRACT
Gross Investment is the only GDP component intended to generate long-term wealth.17 Please note the difference between the terms Gross Investment and Investment. This is to acknowledge that there are components of government spending on
research and development that are oriented toward creating long-term wealth. Additionally, some inventories such as oil and forestry reserves are held with the intention of long-term appreciation. With the exception of gross investment, all the other components of the GDP formula are consumed and spent in the now. This subtlety is necessary to differentiate between the economist’s definition of investment in the GDP formula and the sources of investment that translate into the delivery of innovation. For simplicity, the term investment is used through the balance of this economic discussion with the meaning of gross investment.
