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Tesla’s Gigafactory, under construction in Sparks, Nevada, will be the largest building in the world, by footprint, when it’s finished. There may be solid financial reasons for the PIF investment in Lucid. Similarly, in the Middle East, seemingly outlandish projects can be shoved through with the sheer force of royal will. Group Subscription. Ellen R. After all, the PIF regularly invests in big ideas, especially in tech.

When faced with excess demand, the accelerator theory posits that companies typically choose to increase investment to meet their capital to output ratio, thereby increasing profits. For example, a reduction in the corporate tax rate will have little or no effect on investment because, under the accelerator theory, investment depends on output, not the availability of internal funds. Gross investment, however, will be positive, since firms must replace plant and equipment that is deteriorating.