I keep coming back to a simple fact which cannot be avoided. This is that there are at the end of the day four components to our national income. They are consumer spending, private sector investment in business and housing, government spending and net trade balances. That’s it.
Err, no. Those are the four determinants of our national expenditure.
True, the way we calculate GDP expenditure equals income. But those really are the components of how we spend it, not how we earn our income.