Abstract
Keynes attacked the widespread belief that investment is somehow financed by saving. The persistence of this myth must no doubt be attributed partly to its inherent plausibility: that because saving is a withdrawal from the income stream and investment is an injection, and because in equilibrium saving is equal to investment, it seems only commonsense to suppose that that which is saved must supply that which is invested.
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Notes and References
J. C. Gilbert, Keynes’s Impact on Monetary Economis (London: Butterworth, 1982) p. 78; also stated on p. 29. There are other references on, for example, pp. 69 and 76 which indicate that Gilbert did not see any problem with the idea of saving financing investment.
G. Horwich, Money, Capital and Prices (Homewood: Irwin, 1964) ch. 10.
See J. R. Presley, Robertsonian Economics (London: Macmillan, 1979) pp. 87, 178, 179, 213.
Keynes, General Theory, p. 299. In addition, Shackle has drawn attention to the positive advantages of dealing in stock terms. See G.L.S. Shackle, The Years of High Theory (Cambridge University Press, 1967) p. 145.
C. N. Henning, W. Pigott and R. H. Scott, Financial Markets and the Economy, 2nd edn (New Jersey: Prentice-Hall, 1978) p. 365.
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© 1987 Gordon A. Fletcher
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Fletcher, G.A. (1987). The Finance of Investment. In: The Keynesian Revolution and its Critics. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-08736-5_9
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DOI: https://doi.org/10.1007/978-1-349-08736-5_9
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