Advances in Economics and Business Vol. 2(6), pp. 238 - 247
DOI: 10.13189/aeb.2014.020604
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The Complete Equation, Savings Equals Investment


José Villacís González *
University CEU-San Pablo, Paseo Juan XXIII, 8, 28040 Madrid, Spain

ABSTRACT

Before publication of Keynes’ General Theory of Employment, Interest and Money in 1936, Germán Bernácer had discovered both third-degree net availables and second-class working capital two decades earlier in 1916, neither of which has yet been incorporated in today’s economics. This work undertakes the task, which results in a significant change to the fundamental equation: savings equals investment. To facilitate analysis we separate the process into three phases: the first introduces new availables or net availables of the third degree. The second adds second-degree working capital and the new money required to fund it. In the third we reach the final equation, the result of the two previous phases.

KEYWORDS
Income, Production, Net Availables, Second-Degree Working Capital, Savings, Investment, Static, Dynamic

Cite this paper
José Villacís González . "The Complete Equation, Savings Equals Investment." Advances in Economics and Business 2.6 (2014) 238 - 247. doi: 10.13189/aeb.2014.020604.