Saturday, March 19, 2011
Reformulating National Income
Prof J is a regular here at Interdisciplinary World. Over at his own blog, he riffs off of my discussions of Keynes, reformulating the national income equation. I'm more than a bit leary of the national income equation, because I don't believe that government typically creates wealth, and the equation requires you believe that it makes a positive contribution to national income. Nevertheless, Prof J does some interesting things with the equation that result in a quite remarkable insight: "the household ultimately makes the investment expenditure, but uses the business to do so on their behalf. Households, then, are the real capitalists." Go to his blog to find out how he gets there.
Subscribe to:
Post Comments (Atom)
5 comments:
Thanks for shout-out Troy!
Thank you for the shout-out. That's a pretty interesting conclusion you came to. Is it publishable?
I don't think so. It's actually a pretty standard assumption in micro theory that I read. I felt it was important to bring it the masses though.
I hate national accounting definitions simply because there's so much room for misunderstanding. That's why the need for rehab.
Boy do we need it. I've only ever seen the original version. Of course, my not having seen something in economics isn't that surprising, being mostly self-taught. I'm bound to miss a few details here and there.
I hate such things because with those kinds of aggregates, you hide what is really happening, and there is a collectivist assumption underlying all such aggregates.
Post a Comment