title: Saving-investment balance
text: # Saving-investment balance
  
  In economics, saving-investment balance or I-S balance is a balance of national savings and national investment, which is equal to current account. This relationship is obtained from the national income identity.
  
  ## Description
  
  This is the national income identity:
  
      $Y=C+I+G+(EX-IM)$
  
  where
  
  * Y: GDP,
  * C: national consumption,
  * I: national investment,
  * G: government spending,
  * EX: export,
  * IM: import,
  * EX－IM: current account.
  
  The national income identity can be rewritten as following:
  
      $(Y-T-C)+(T-G)-I=EX-IM$
  
  where T is defined as tax. (Y-T-C) is savings of private sector and (T-G) is savings of government. Here, we define S as National savings (= savings of private sector + savings of government) and rewrite the identity as following:
  
      $S-I=EX-IM$
  
  This identity implies that the difference of national savings and national investment is equal to current account.
  
  