> 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.
.
Aha, I see your point.
But doesn't the *distribution* of capital gains income have a macro significance through its effect on balance sheets? Let's say households' bull-market CG income came at the expense of the corporate sector. Wouldn't that mean that household balance sheets are a little better off, and corporate balance sheets a little worse off, than the NIPA stats make it seem? Wouldn't that have some Minskyan significance for the financial fragility of the macroeconomy? Perhaps it explains why investment, but so far not consumption, has taken a hit?
Seth