Determination of Income and Employment

Question

What is the difference between ex ante (planned) investment and ex post (realised) investment?

Answer

Difference between Ex-ante (planned) and Ex–post (actual) investment. Planned investment is the investment which is desired to be made by the firms and planners in the economy during a particular period in the beginning of the period. As against it, the actual or realised investment of a period (e.g., a year) measured after the fact is called ex-post or actual investment. It needs to be noted that Keynes included in investment the inventories of unsold goods which he called unplanned investment. Thus actual investment equals planned + unplanned investment. Briefly put, ex-ante investment is intended or desired investment whereas ex-post (realised or actual) investment is equal to planned investment + unplanned investment.
Hence actual investment may differ from planned investment because of unplanned addition or reduction in inventories (i.e., stock of goods).

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