Ex-ante

The term ex-ante (sometimes written ex ante or exante) is a phrase meaning 'before the event'. Ex-ante or notional demand refers to the desire for goods and services which 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 in advance (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.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.)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)For these anticipations determine the behaviour of the economic subjects and consequently those changes in the whole price system which during a period actually occur as a result of the actions of individuals. (Gunnar Myrdal,Monetary Equilibrium, London : W. Hodge 1939: 121)Some of these quantities refer directly to a point of time. That is true of 'capital value' as also of such quantities as demand and supply prices. Other terms – as e.g. 'income', 'revenue', 'return', 'expenses', 'savings', 'investments' – imply, however, a time period for which they are reckoned. But in order to be unambiguous they must also refer to a point of time at which they are calculated. (Gunnar Myrdal, Monetary Equilibrium, London : W. Hodge 1939: 46–7)Myrdalian ex ante language would have saved the General Theory from describing the flow of investment and the flow of saving as identically, tautologically equal, and within the same discourse, treating their equality as a condition which may, or not, be fulfilled. (Shackle, G.L.S. (1989) 'What did the General Theory do?', in J. Pheby (ed), New Directions in Post-keynesian Economics, Aldershot: Edward Elgar.) The term ex-ante (sometimes written ex ante or exante) is a phrase meaning 'before the event'. Ex-ante or notional demand refers to the desire for goods and services which 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 in advance (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.