Saving is the Accounting Record of Investment

Basil John Moore

Chapter 7 in Shaking the Invisible Hand, 2006, pp 156-173 from Palgrave Macmillan

Abstract: Abstract Economists have long viewed saving and investment as independent behavioral relationships undertaken by households, firms, and governments. Business firms, the administrators of the economy’s capital stock, are responsible for most investment spending. Households, the ultimate owners of the economy’s private net worth, undertake most of the economy’s saving. Governments tax and spend. They save by running a budget surplus and not spending all their income. But saving and investment are identical ex post as a national income identity. The unresolved question concerns the mechanism that brings these two alledgedly independent volitional magnitudes into ex post equality?

Keywords: Aggregate Demand; Financial Asset; Private Saving; Mainstream Economist; Total Saving (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-51213-9_7

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DOI: 10.1057/9780230512139_7

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