SAVING-INVESTMENT EQUALITY: A classical economic proposition stating that flexible prices ensure an equality between saving and investment. This equality is essential to obtain the classical economic conclusion that unrestricted markets achieve and maintain full employment. This is one of the three assumptions underlying classical economics. The other two assumptions are flexible prices and Say's law. See also | classical economics | flexible prices | Say's law | full employment | saving | investment | Keynesian economics | injection-leakage model | laissez faire | invisible hand |
