Most (if not all) enzymes that make/break phosphodiester bonds in DNA need Mg2+ as a cofactor. Decreasing Mg2+ too much will decrease the activity of Taq and other polymerases, and therefore have a negative effect on PCR yield. Here are a few articles on PCR and MgCl2:

Eckert KA, Kunkel TA. High fidelity DNA synthesis by the Thermus aquaticus DNA

polymerase. Nucleic Acids Res. 1990 Jul 11;18(13):3739-44. PubMed PMID: 2374708;

PubMed Central PMCID: PMC331072.

Park YH, Kohel RJ. Effect of concentration of MgCl2 on random-amplified DNA

polymorphism. Biotechniques. 1994 Apr;16(4):652-6. PubMed PMID: 8024785.

Roux KH. Optimization and troubleshooting in PCR. PCR Methods Appl. 1995

Apr;4(5):S185-94. PubMed PMID: 7580907.

Check the pcr trouble shooting page of thermo that explains the effect of each and every component in pcr reaction

I found that this paper does a thorough presentation:

http://www.biotechniques.com/multimedia/archive/00011/97233rr01_11727a.pdf