The savings-investment spending identity says that savings and investment spending are always equal for the economy as a whole.

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The savings-investment spending identity is a fundamental principle of macroeconomics and states that the total amount of savings in the economy must be equal to the total amount of investment spending. This is because every dollar of savings that is not spent is available to be loaned out to borrowers who use the funds to invest in things like factories, equipment, and research and development. In other words, savings represent the supply of loanable funds in the economy, while investment spending represents the demand for those funds. Therefore, the two must always be equal.

The Savings-Investment Spending Identity Says That Savings and Investment Spending