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So we have a I still play with blocks shirt quandary: How can we have an economic theory that does not describe changes in the level of wealth? The fact is, that in typical explanations of the Savings equals Investment identity, one might come across in economics courses, it is implied that somehow this Savings that equals investment DOES include changes in the level of wealth. And that, I believe, is not only not true, it has led to all sorts of confusion. After thinking about this, I realized, that the expression for savings needed an additional element if it was going to include any changes in the level of wealth, I had to do just that. I had to add changes in level of wealth to the expression for savings.

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So I added to the I still play with blocks shirt definition of any savings that “results from a period of economic activity”, the amount of any changes in the total level of wealth that occurred in that economy. And actually not just added the amount of wealth created, but also subtract off the amount of wealth depleted. So, to the definition for savings I add “wealth created” minus “wealth depleted”. I call this quantity the “net production of wealth”, or simply “net production”. So this means the accurate expression for the amount of savings to “come out of a period of economic activity” needs to include the “savings that is the preservation of investment money” PLUS “net production of wealth”.