Ex ante and ex post concept

Subject : Economy

Ex- Post and Ex- Ante are terms of Latin origin that mean “after the event” and “before the event,” respectively.
In simple words, ‘Ex-ante’ means planned and ‘Ex-post’ means actual or realised.
In the field of finance, these terminologies depict the returns from an investment or any other economic activity.

Ex-Ante concept:

It is a prediction of the returns that an investor can get from a security or from a company. Thus, it is a futuristic prediction.
Ex-Ante is a prediction and is useful for an investor, a company, the various economic sectors, and the overall economy as a whole.
Example– Ex-ante savings refers to the desired savings or planned savings during the period of one year. This is the savings which is intended to be made in the economy during the period of one year.

Ex-Post concept:

It is the opposite of the term Ex-Ante.
It means after the occurrence of an event. Hence, the term is important for those who rely upon actual or historical results of security for further decision-making.
Investors and analysts can use Ex-Post data for the prediction of future trends, prices, etc. They can predict the returns from a security on the basis of actual returns from it over the years.
Example- Ex-post savings refers to the actual savings in the economy from the given level of income during the period of one year.