Mary Schweitzer writes: "Regarding financial intermediation: Focusing simply on the level of savings and concurrent bank activities misses an important engine in the history of finance -- financial innovation. The shift into modern rates of growth in the U.S. sometime around the 1810s or 1820s was preceded by a profound restructuring of financial institutions and markets. As reducing transportation costs benefits both consumer and producer, so too reducing costs of financial intermediation benefits those who would fall into far different categories if you stuck to the rigid box category interpretations of macro growth." You still need to be cognizant of the impact of innovation on the balance sheet of banks. Successful innovation reduces the cost of financial intermediation as well as introduces other financial products in the market place. For example, the ATM technology reduces the (labor) cost of banking while it increases deposits from customers. Deposits increase because customers reduce their desired cash-deposit ratios. Thus for the economy, more purchasing power is made available for borrowers (possibly at a cheaper cost), and more investment spending also takes place. Again we see the logical prior of savings over investment spending. I shall resist the temptation from Mary and some others to engage in a debate over redistributive or leftist ideology. Not because I can't (and don't in other contexts; for a teaser, remember the 10th of the Ten Commandments, or "Suggestions?"), but because that will detract from the issue at hand: how do we go about doing "proof in economics", and whether worrying about the fundamentals would not be a more worthwhile endeavor than evaluating econometrics results or models. So far, I think Larry Moss's point has well been confirmed. If we can't even agree on what is meant by investment and how it is financed, what's the point checking for levels of statistical significance, cointegration, etc.? As my last econometrics professor used to warn, "garbage in, garbage out!" James Ahiakpor CSUH, Hayward