ABSTRACT
Equilibrium, it would seem, will never be attained; it is not possible for aggregate demand to come into equality with the value of available supplies if the whole of the original excess of demand circulates at every turn of the circuit. Both demand and supply increase with each tour of the circuit, but demand does not maintain its lead; eventually, the excess demand will be reduced to an amount so insignificant as to be hardly worth counting, and equilibrium will have been achieved. For the economy as a whole, then, the condition of equilibrium is that intended saving must equal intended investment. But it could easily happen that the desired amount of investment differs from the amount of intended saving; by planning to consume too little, consumers and government authorities may leave for capital formation purposes a larger part of output than is wanted.
