>Economic income is consumption plus the change in >net worth (c.n.w.),
Not in national income and product accounts. It is current income minus consumption. Current income does not include appreciation of assets. Further, if you want savings to be equal to the flow of investment in the NIPA then you can't include change in asset value in your income calculation. NIPA attempts to describte the disposition of current production. There are no ballance sheet concepts (other than depreciation in net national income, but depreciation is thought of as real depreciation of physical assets and does not attempt to include declines in market value due to changes in valuation). <snip> In contrast, when one adds to net worth by not spending what one earns, and this savings is loaned for investment in more capital goods, this is a positive rather than zero-sum game for society. So one could differentiate zero-sum from positive-sum savings. >>>I'm not sure what the point of all this is. If you look at the Gale and Sabelhaus >article it should be clear how the NIPA concept of savings differs from change in >wealth, why both are useful concepts, and why it is inappropriate to proclaim >household savings behavior as anomalous if there are large positive _aggregate_ >changes in the value of wealth. - - Bill William T. Dickens The Brookings Institution 1775 Massachusetts Avenue, NW Washington, DC 20036 Phone: (202) 797-6113 FAX: (202) 797-6181 E-MAIL: [EMAIL PROTECTED] AOL IM: wtdickens
