The relationship of savings in some important variables in the business cycle

Abstract

The article analyses, in mathematical terms, the relationship of savings to some variables in the business cycle. Referring back to the line of thought developed in his book Total Business Fluctuations (Gainesville, Kallman, 1949), the author criticises the common sense definition of “cash savings” and “goods savings”, and proposes and discusses an alternative definition, which, in his opinion, offers decisive advantages for purposes of analysing the trade cycle and the savings process. JEL: E21, E32

Keywords

• Savings
• business cycle
• cash savings
• goods savings
• trade cycle