In the mainstream view, volatility of investment spending is one of the major source of instability in the macro economy.
Major causes of instability in macro economy are stock market fluctuations, fluctuations in the prices of houses and other assets, black swan events, and changes in interest rates. When the factors that influence an economy are out of balance than economic instability occurs.
Spending on new capital merchandise is named investment expenditure. The vital kinds of investment are business fixed investment, residential investment, inventory investment, autonomous investment and induced investment. Investment spending is totally unstable. Increase in investment spending impacts the level of production of good and services in an economy.
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