Re: S=I, an old debate.

[Chas Anderson <chasna@xxxxxxxxxxx>]

At 05:54 PM 8/17/98 +1000, you wrote:
>At 00:26 17/08/98 -0700, you wrote:
>
>>I could, say, use part of my cash holdings to purchase a new financial
>>asset.
>
>	Then net savings have not changed, they have just changed hands.
>(BTW, readers will note that this is one of the first issues covered in that
>dusty old GT).
>
>
>
>Virtually,
>
>Bruce McFarling, Newcastle, NSW
>ecbm@xxxxxxxxxxxxxxxxxxx


No, you forgot the distinction between savings and saving. Saving
is with respect to a given time period. Savings is an accumulation,
a stock. I'm changing the composition of my stock, so to speak. I'm
now holding a financial asset and less money, say, pari passu, but the
purchase of the asset increased my rate of saving, ceteris paribus,
while the reduction in my cash holdings (stock) did not affect
the current flow of saving.

Chas