tag:blogger.com,1999:blog-4290163255778893789.post7303783331338455859..comments2024-03-16T05:19:07.061-04:00Comments on Retirement Blues: Economic Accounting IdentityJazzbumpahttp://www.blogger.com/profile/07337490817307473659noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-4290163255778893789.post-36319784440186710632011-04-14T10:32:40.025-04:002011-04-14T10:32:40.025-04:00The savings = investment "identity" is n...The savings = investment "identity" is not so cut and dried. There is a temporal element that makes it a bit <a href="http://www.winterspeak.com/2009/11/saving-is-not-investment.html" rel="nofollow">long-runnish.</a><br /><br />It also seems abstract and artificial. What assumption underlie this identity, and how are they validated?<br /><br />I read something in the last few days pointing out that savings and investment are categorically different, but don't remember where, alas. <br /><br />Further, it seems to me that the identity takes no account of hoarding behavior. Besides, can't savings ultimately flow into consumption, rather than investment?<br /><br />As an identity principle, the whole thing seems quite dicey.<br /><br />Cheers!<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-16262166492039629702011-04-14T10:10:42.424-04:002011-04-14T10:10:42.424-04:00re: "savings = investment"
Keynes recog...re: "savings = investment"<br /><br />Keynes recognized that savings and investment must be equal, but said that if the desire to save exceeds the desire to invest, the difference may be seen as an increase in inventories.<br /><br />I like the idea that "accounting identities do not in any way imply causation," but facts are facts, and if things have to be equal then they have to be equal.<br /><br />Things can become equal through natural processes like inflation or deflation...<br /><br />ArtThe Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-92153120986690479612011-04-14T09:10:20.895-04:002011-04-14T09:10:20.895-04:00All the textbooks tell you, right up front: accoun...All the textbooks tell you, right up front: accounting identities do not in any way imply causation, and they certainly aren't normative statements.<br /><br />Government deficit = private savings<br /><br />Savings = Investment<br /><br />So we should obviously increase government debt to increase investment! It's *obvious*!Steve Rothhttp://asymptosis.comnoreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-11354065417035591152011-04-12T21:34:15.137-04:002011-04-12T21:34:15.137-04:00You got me!
Somehow, it just wasn't on my rad...You got me!<br /><br />Somehow, it just wasn't on my radar screen.<br /><br />Cheers!<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-80426120156845161892011-04-12T19:00:36.467-04:002011-04-12T19:00:36.467-04:00C'mon, call the guy a THUG!!!C'mon, call the guy a THUG!!!The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.com