Hey Dave,
I think we agree but the terminologies can overlap, incidentally I think.
I’ll say this:
Hoarding (money under the mattress) is definitely an abstention from consumption. As is investment (savings deposits, equities, etc.). Any increase in those two categories which comes as a result from a reduction in consumption does lengthen the capital structure by starving lower order businesses, freeing capital for higher order businesses. Even if very little of that money goes into investment. If both investment and consumption are subtracted from and investment suffers a greater subtraction, then the capital structure shortens.
It follows then that, in a recession, when many people may pull out resources from investment and into hoarding, it isn’t indicative of a shortened time preference but of a lessened risk preference.
Capital theory instructs us that it is lower order businesses which will gain most from a gain in purchasing power originating in consumers when they are not applying said acquired purchasing power to investment.
Ceded
Sorry Dave I don’t mean to suddenly pile onto the wall of text that Neo and Student provided you, I just found objection to some of the things you said.