Ryan Elantri — Savings and Investment

In macroeconomics Savings and Investment are two components of a country’s Gross Domestic Product (GDP). Savings (S) must, at the very least, be equal to a nation’s Consumption, Investment, and Government Spending (C+I+G) in order for the nation to not be running an international deficit.

On a microeconomic level, saving and investing wisely are important as well — whether you are saving for a down payment on a house or for a vacation. By the same token, over-saving is detrimental not only to a consumption-driven economy but to your own, personal finances that otherwise can be enhanced through investment. Money’s value fluctuates over time; sometimes it deflates, as it does in Japan, and at other times it inflates, as it is currently doing in Venezuela. The only vehicle for combatting these fluctuations in the marketplace is investment. Investing wisely projects the future value of your money’s present value, and at the same time takes into account volatility in the market.