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In the national accounts [0] spending on bridges shows up as investment, while Netflix is consumption Keynes' book General Theory breaks down GDP into componen
by yowlish 4y ago
In the national accounts [0] spending on bridges shows up as investment, while Netflix is consumption
Keynes' book General Theory breaks down GDP into components, of which consumption and investment are two
Dynamic choices about consumption vs investment are at the core of macro models. In analysis of long term trends, the Solow growth model admits analysis of national savings rates. In the analysis of shorter term fluctuations, DSGE models explicitly address the household intertemporal consumption-savings question, seen in the Euler equation
[0] https://en.m.wikipedia.org/wiki/National_accounts https://en.m.wikipedia.org/wiki/National_accounts