- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

"Investment" means Investment in productive capacity, not "financial investment" in terms of buying a financial asset.

Buying and selling stocks and bonds (debentures) is not treated as Investment in Macro because:

• most of the transactions involve existing assets, and at the Macro level it nets out ... the purchase by the new owner is offset by the sale by the original owner, the liquid funds received by the original owner offset by the liquid funds surrendered by the new owner. It all nets out
  
• that includes real (realized) capital gains from increasing financial capital valuations ... the realized capital gain exists because someone handed the money over to pay for it
  
• new financial assets in the aggregate occur when new productive capacity is produced, so Macro goes straight to that and calls that "Investment".