Saving does not equal investment

Boonserm Booncharoenpol
Additional contact information
Boonserm Booncharoenpol: Faculty of Economics Krirk University

Macroeconomics from EconWPA

Abstract: SAVING DOES NOT EQUAL INVESTMENT John Maynard Keynes confused economists and politicians all over the world when he wrote, “Saving is necessary to equal investment” together with a few equations to confirm his idea and finally concluding that S = I. There have been repeated discussions about how saving can equal investment, accidentally or with certainty. We may think that Keynes explained about how saving money is used in the same amount either to invest by savers or by borrowers. But this is not what he meant. Keynes merely wrote that saving is residual. Residual from what? This paper shows that S always equals I in a closed economy. But even as S equals I, saving does not equal investment. Because I is investment but S is not saving.

Keywords: Keynes; saving; investment; S does not equal I; Confusion about saving (search for similar items in EconPapers)
JEL-codes: E (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
Date: 2005-10-16
Note: Type of Document - doc; pages: 2

Downloads: (external link)
http://129.3.20.41/eps/mac/papers/0510/0510014.doc (application/msword)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpma:0510014

Access Statistics for this paper

More papers in Macroeconomics from EconWPA
Series data maintained by EconWPA ().