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Ex-ante
The term ex-ante (sometimes written ex ante or exante) is a New Latin phrase meaning "before the event".
In economics, ex-ante or notional demand refers to the desire for goods and services that is not backed by the ability to pay for those goods and services. This is also termed as 'wants of people'.
Ex-ante is used most commonly in the commercial world, where results of a particular action, or series of actions, are forecast (or intended). The opposite of ex-ante is ex-post (actual) (or ex post). Buying a lottery ticket loses you money ex ante (in expectation), but if you win, it was the right decision ex post.
The ex-ante (and ex-post) reasoning in economic topics was introduced mainly by Swedish economist Gunnar Myrdal in his 1927–39 work on monetary theory, who described it in this way:
An important distinction exists between prospective and retrospective methods of calculating economic quantities such as incomes, savings, and investments; and [...] a corresponding distinction of great theoretical importance must be drawn between two alternative methods of defining these quantities. Quantities defined in terms of measurements made at the end of the period in question are referred to as ex post; quantities defined in terms of action planned at the beginning of the period in question are referred to as ex ante.)
Focusing attention on the relation between saving and investment, Myrdal argued that one may without any contradiction consider that, as they are made by separate agents, ex ante saving and investment decisions are not at parity in general while ex post saving and investment are recorded in bookkeeping balance exactly:
There is in fact no contradiction at all between the statement of an exact bookkeeping balance ex post and the obvious inference that in a situation when saving is increasing without a corresponding increase of investment, or perhaps with an adverse movement in investment, there must be a tendency ex ante to a disparity. (Gunnar Myrdal, Monetary Equilibrium, London : W. Hodge 1939: 46)
This analysis has become a standard tool in macroeconomics.
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Ex-ante
The term ex-ante (sometimes written ex ante or exante) is a New Latin phrase meaning "before the event".
In economics, ex-ante or notional demand refers to the desire for goods and services that is not backed by the ability to pay for those goods and services. This is also termed as 'wants of people'.
Ex-ante is used most commonly in the commercial world, where results of a particular action, or series of actions, are forecast (or intended). The opposite of ex-ante is ex-post (actual) (or ex post). Buying a lottery ticket loses you money ex ante (in expectation), but if you win, it was the right decision ex post.
The ex-ante (and ex-post) reasoning in economic topics was introduced mainly by Swedish economist Gunnar Myrdal in his 1927–39 work on monetary theory, who described it in this way:
An important distinction exists between prospective and retrospective methods of calculating economic quantities such as incomes, savings, and investments; and [...] a corresponding distinction of great theoretical importance must be drawn between two alternative methods of defining these quantities. Quantities defined in terms of measurements made at the end of the period in question are referred to as ex post; quantities defined in terms of action planned at the beginning of the period in question are referred to as ex ante.)
Focusing attention on the relation between saving and investment, Myrdal argued that one may without any contradiction consider that, as they are made by separate agents, ex ante saving and investment decisions are not at parity in general while ex post saving and investment are recorded in bookkeeping balance exactly:
There is in fact no contradiction at all between the statement of an exact bookkeeping balance ex post and the obvious inference that in a situation when saving is increasing without a corresponding increase of investment, or perhaps with an adverse movement in investment, there must be a tendency ex ante to a disparity. (Gunnar Myrdal, Monetary Equilibrium, London : W. Hodge 1939: 46)
This analysis has become a standard tool in macroeconomics.