Re: MOdigliani life cycle

[Harry Veeder <eo200@xxxxxxxxxxxxxxxxxxx>]

The consumer may spend in manner which is either stimulative OR responsive.
When money is spent in a manner which encourages more production this
is a stimulus, i.e. an investment. When money is spent in a manner which
encourages less production this is a response, i.e. a saving.


Harry Veeder


> From: Warren Mosler <mosler@xxxxxxxxxxxxxx>
> Date: Tue, 14 Oct 2003 19:35:48 -0700 (PDT)
> To: pkt@xxxxxxxxxxxxxxxx
> Subject: Re: MOdigliani life cycle
>
>
> Date: Sun, 12 Oct 2003 15:02:28 -0400
> From: "pdavidso" <pdavidso@xxxxxxx> | This is spam |
> Add to Address Book
> 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
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