--- Jacob W Braestrup <[EMAIL PROTECTED]> wrote: > an income is a certain payment at a certain date, subject to a > formal or informal contract,
That is income from an accounting view, but not from the economic perspective. Economic income has no regard for contracts. In economics, income equals consumption plus the change in net worth during some time. > while a capital gain is uncertain and not guaranteed to be positive. The ex-ante uncertainty is irrelevant. Dividends are also uncertain ex-ante. For income, we take some time period, such as a year, and calculate the change in actual net worth. If the change in net worth is negative, it gets subtracted from consumption. It is possible for income to be negative. Fred Foldvary ===== [EMAIL PROTECTED]
