ABSTRACT
The effect on full employment equilibrium depends on which alternative they choose: real saving or monetary saving. Investing in real wealth may take several forms including: the storage of durable consumption goods for the purpose of future consumption; the ordering of consumption goods or services for forward delivery for the purpose of future consumption; and the manufacture of producer goods in order to make goods for future consumption. A switch of preferences to any of these forms of investment diverts demand away from “present goods” towards “future goods”. There is only one change between the new equilibrium and the initial equilibrium — a shift between consumption and real wealth. There is no change in the level of prices or in the volume of employment. If the additional goods available for future periods are capital instruments for use in production, it is probable that they will enhance future productivity and expand production in subsequent periods.
