Re: Savings and NIPA

["Esteban Perez" <eperez@xxxxxxxxxxxx>]

>>> "Gunnar Tomasson" wrote:
Income, as measured by NIPA, only includes wages, dividends, interest, and
rental income; it does NOT include capital gains on stocks and other assets.

Comment:

Keynes' concept of "income" in Ch. 6 of the General Theory "does NOT include
capital gains on stocks and other assets."
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It is aconvention in national accounts not to include capital gains.It has a rationale. What matters is what has happened. Capital gains are included when they in fact materialize and appear say as services' incomes. In Keynes, according to what I understand, it is a very different issue. Capital gains do not enter into the entrepreneurs' decision on "the same scale" as what Keynes called supplementary cost or prime cost. Furthermore Keynes' definitions are to some extent forward lookjing and include
expectations. Not the convcentional national accounts. You can't compare.

Esteban Perez