Monthly Archives: September 2016

The Importance of Production, Savings, and Investments: A Tale of Two Islands

Day 1 Imagine a group of ten people getting stranded empty-handed, but with enough fresh water to last them a week or so, on a remote island they decide to name Prosperity Island, or Prosperity for short. A few miles south, another group of ten people get stranded on another island, identical to the other island in all aspects. Like the other group, they arrive empty-handed, except for having enough water also lasting for a week. This group names the island Poverty Island, Poverty for short. Both groups’ consolation price…