In Chapter 6, Keynes attempts to establish a canonical definition of income, saving, and interest, consistent with his theory of effective demand, as distinguished from classical theories of employment and value which assume a more fixed relationship between supply and demand. Here, Keynes defines income as the entrepreneur’s proceeds (), minus the user cost () incurred over a given period of production. He defines net income as proceeds minus user cost, minus supplementary cost (), or the excess of expected depreciation of capital equipment beyond user cost.
unresolved Keynes also offers canonical definitions of saving and investment, as derived from the definition of income. He also equates saving and investment, but I don’t quite understand how (see r-JK-GT-25.1).