>The Bank Credit Analyst study was talking about *realized* capital gains.
>Its point is that household saving numbers are derived by subtracting
>spending from income, but household income is understated for two reasons:
>realized capital gains aren't included; and higher bull-market pension
>benefits aren't counted (only corporate contributions).
It makes sense to talk about realized CGs when you're talking about income distribution, but when you're talking macroeconomics, it doesn't. The NIPA concept that income must correspond to production seems pretty well-grounded to me - on one side of the ledger you've got real world goods and services, and on the other you've got their monetary representation. With CGs, there's only the representation. That cash has to come from somewhere - the person who bought the stock from the seller, a foreign capital inflow, or something like that. You're not foregoing consumption in the present for returns in the future.
Doug