How Intended Investment Can Fall Short of Investment, Personal Version

By -
I caught and salted 100 cod fish last week. Here is how I allocated them:

20 I planned to eat.
60 I planned to sell on the market to finance other consumption.*
20 I planned to set aside as a store enabling me to work on capital goods in the future, e.g., a better fishing net.


Here is what actually happened:
20 I ate.
50 I sold on the market, because, at the price I planned to sell, 50 was all that was demanded.
30 I set aside.

My intended investment was 20 cod fish. But I wound up, due to unexpected market conditions, actually saving 30 fish.

S = I, always.

But sometimes I can include the unintentional piling up of inventories. That might be a problem, depending on whether you think the economy is more dominated by negative or positive feedback effects.

* Mainly the high-blood-pressure pills I must take due to eating so much salt cod.

Comments

Post a Comment

Popular posts from this blog

Libertarians, My Libertarians!

By -
Cruel to be kind means that I love you . Because, while I think you are mistaken, your hearts are in the right place -- yes, even you, Silas --  unlike some people . This Breitbart fellow (discussed in the link above), by all appearances, deliberately doctored a video of Shirley Sherrod to make her remarks appear virulently racist, when they had, in fact, the opposite import. I heard that at a recent Austrian conference, some folks were talking about "Callahan's conservative turn." While that description is not entirely inaccurate, I must say that a lot of these people who today call themselves conservative give me the heebie-jeebies.
Read more

"Pre-Galilean" Foolishness

By -
 I am currently reading The Master and His Emissary , which appears to be an excellent book. ("Appears" because I don't know the neuroscience literature well enough to say for sure, yet.) But then on page 186 I find: "Asking cognition, however, to give a perspective on the relationship between cognition and affect is like asking astronomer in the pre-Galilean geocentric world, whether, in his opinion, the sun moves round the earth of the earth around the sun. To ask a question alone would be enough to label one as mad." OK, this is garbage. First of all, it should be pre-Copernican, not pre-Galilean. But much worse is that people have seriously been considering heliocentrism for many centuries before Copernicus. Aristarchus had proposed a heliocentric model in the 4th-century BC. It had generally been considered wrong, but not "mad." (And wrong for scientific reasons: Why, for instance, did we not observe stellar parallax?) And when Copernicus propose...
Read more