For the macro-economically inclined . . .
People talk about economic recovery being 'fueled'
or propelled by investment spending. Isn't this
a non-sequitur? If there is a dollar less of
investment spending, mustn't there be a dollar
more of consumption spending?
The exception would seem to be the extent to
which consumption is devoted to imports, which
stimulates employment somewhere else. In a closed
economy, doesn't more investment automatically
mean less income, rather than more? I take the
point that over an extended period, investment
means an expansion of income, but I get the
feeling that people speak of a boost from
investment as if it was consumption, notwithstanding
the fact that such a boost means less of something
else, such as consumption.
mbs
