CH. 7 THE MEANING OF SAYING AND INVESTMENT 79

to make by the contrast between effective demandand income.1

IV

We come next to the much vaguer ideas associatedwith the phrase “forced saving”. Is any clear signifi-cance discoverable in these? In my Treatise on Money(vol. i. p. 171, footnote) I gave some references toearlier uses of this phrase and suggested that they boresome affinity to the difference between investment and“saving” in the sense in which I there used the latterterm. I am no longer confident that there was in factso much affinity as I then supposed. In any case, Ifeel sure that “forced saving” and analogous phrasesemployed more recently (e.g. by Professor Hayek or Pro-fessor Robbins) have no definite relation to the differencebetween investment and “saving” in the sense intendedin my Treatise on Money. For whilst these authorshave not explained exactly what they mean by thisterm, it is clear that “forced saving”, in their sense,is a phenomenon which results directly from, and ismeasured by, changes in the quantity of money orbank-credit.

It is evident that a change in the volume of outputand employment will, indeed, cause a change in incomemeasured in wage-units; that a change in the wage-unit will cause both a redistribution of income betweenborrowers and lenders and a change in aggregateincome measured in money; and that in either eventthere will (or may) be a change in the amount saved.Since, therefore, changes in the quantity of money mayresult, through their effect on the rate of interest, in achange in the volume and distribution of income (aswe shall show later), such changes may involve, in-directly, a change in the amount saved. But such

1 Vide Mr. Robertson’s article “Saving and Hoarding” (Economic Journal,September 1933, p. 399) and the discussion between Mr. Robertson, Mr.Hawtrey and myself (Economic Journal, December 1933, p. 658).