Abstract:

The article says about the sources of origin of the economic cycle. The main role of investment as a tool for the implementation of innovations that increases the growth rate of the economy on the upward trend of the economic cycle is grounded. Also, the role of investment as a tool for divestiture on the downward trend of the economic cycle is justified. The cyclical nature of economic development due to the presence of an  impetus at the stage of formation of a new economic cycle and the availability factor of inhibition, which defines the turning point from an upward to a downward trend. The source of economic growth is innovation (scientific discoveries) that reduce the cost of production and increase the return on invested capital. Investments are an instrument of implementation of scientific discoveries (which later become innovation), providing a multiplier effect at the stage of growth of the economy.