Explain, in brief, the concept of ex-ante and ex-post saving and investment. Why are ex-ante saving and ex-ante investment not always equal to each other?
Ex-ante
investment refers to the desired investment or planned investment during the
period of one year. This is the investment expenditure which is intended to be
made in the economy during the period of one year.
Ex-post investment
refers to the actual investment in the economy during the period of one year.
This aspect of investment is considered in the calculation of National
Income.
Ex-ante
savings refers to the desired savings or planned savings during the period of
one year. This is the savings which is intended to be made in the economy
during the period of one year.
Ex-post savings refers
to the actual savings in the economy from the given level of income during the period of one year. This aspect of savings
is considered in the calculation of National Income.
Ex-ante savings and Ex-ante investment are not always equal because at different level of income Aggregate demand is not equal to aggregate supply.
Ex-ante investment refers to the desired investment or planned investment during the period of one year. This is the investment expenditure which is intended to be made in the economy during the period of one year.
Ex-post investment refers to the actual investment in the economy during the period of one year. This aspect of investment is considered in the calculation of National Income.
Ex-ante savings refers to the desired savings or planned savings during the period of one year. This is the savings which is intended to be made in the economy during the period of one year.
Ex-post savings refers to the actual savings in the economy from the given level of income during the period of one year. This aspect of savings is considered in the calculation of National Income.
Ex-ante savings and Ex-ante investment are not always equal because at different level of income Aggregate demand is not equal to aggregate supply.
