Re: MOdigliani life cycle

[Warren Mosler <mosler@xxxxxxxxxxxxxx>]

Date: Sun, 12 Oct 2003 15:02:28 -0400
From: "pdavidso" <pdavidso@xxxxxxx> | This is spam |
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To: "Warren Mosler" <mosler@xxxxxxxxxxxxxx>
CC: pkt@xxxxxxxxxxxx
Subject: RE: Modigliani life cycle




>===== Original Message From Warren Mosler
<mosler@xxxxxxxxxxxxxx>
=====
>Ironically, he is of course correct in real terms-
>real savings is only the result of actual
>employment/production, etc.  So one doesn't save in
>real terms, but only consumes, until one goes to
work,
>and when one retires one only consumes as well.


Not correct at all in real terms or money terms or any
other terms.
Modigliani's thesis involves savings behavior of
households -- so
children are
included in  consumtpion by the age of the head of the
household.

OK, DIDN'T KNOW THAT, THANKS.

HOWEVER, IN ANY CASE, REAL INVESTMENT CAN ONLY COME
FROM REAL OUTPUT, WHICH IS PRODUCED BY THOSE ACTUALLY
WORKING.  NON WORKERS DON'T CONTRIBUTE TO REAL
INVESTMENT (WHICH IS REAL SAVINGS).

Also retired folks have income from social security,
pensions, interest
from
previous savings and investments etc. and the
University of Wisconsin's
Poverty Institute Study of over 9000 households
indicated that the
average
propensity to save increases with age -- so that OUT
OF ANY GIVEN LEVEL
OF
INCOME, 70 year old head of households spend less out
of their income
than 65
year olds, etc.

UNDERSTOOD!  I WAS MAKING A DIFFERENT POINT- THAT OF
NON WORKERS NOT CONTRIBUTING TO REAL INVESTMENT,
REGARDLESS OF 'FINANCE.'

WARREN


pAUL



=====
Warren Mosler, www.mosler.org
Valance Co. Inc.
5000 Estate Southgate
Christiansted, USVI  00820
340-692-7710 office phone
Primary email contact:  wmosler@xxxxxxxxxx

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