(S-I) in Sectoral Balances

by Joe Blackwell

I see a lot of confusion concerning why the private sector balance is represented by (S-I) in the sectoral balances equation. This is something that confused me for a long time when starting to learn about macroeconomics, so I thought it might be a useful resource to quickly explain what (S-I) means and why it represents the balance of the private sector. Continue reading “(S-I) in Sectoral Balances”