2008 SNA

More National Accounts: Consumption Of Fixed Capital

29 March 2012

In one of my recent posts, Saving Net Of Investment, I went into gross saving versus saving net of consumption of fixed capital. I showed how depreciation – or more appropriately, consumption of fixed capital – is treated in the flow of funds accounts. Since the transactions flow matrix is a powerful tool for visualizing [...]

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Kalecki’s Profit Equation

12 March 2012

In my post The Transactions Flow Matrix, I went into how a full transactions flow matrix can be constructed using a simplified national income matrix. Let us reanalyze the latter. The following is the same matrix with some modifications – firms retain earnings and there are interest payments. FU is the undistributed profits of firms. [...]

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Deutsche Bundesbank’s TARGET2 Claims

5 March 2012

Yesterday Wolfgang Münchau wrote an article in the Financial Times The Bundesbank has no right at all to be baffled in which he gave his opinion about Bundesbank President Jens Weidmann’s leaked letter to the European Central Bank President  Mario Draghi expressing concerns on the Bundesbank’s TARGET2 assets. According to the Bundesbank December 2011 Monthly Report, its claims on [...]

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Net Worth: Part 2

16 February 2012

A commenter on my post on Net Worth asked me if I could do an example. Here it goes. First I do it as done by national accountants as per 2008 SNA - the System of National Accounts and then by the method used by the Federal Reserve’s Z.1 Flow of Funds Accounts. The example is from a [...]

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Income And Expenditure Flows And Financing Flows

13 February 2012

In the previous two posts, I went into a description of the transactions flow matrix and the balance sheet matrix as tools for an analytic study of a dynamical study of an economy. During an accounting period, sectors in an economy are making all kinds of transactions. These can be divided into two kinds: Income [...]

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Net Worth

10 February 2012

In my previous post Sources And Uses Of Funds, I used the term “net worth”, and the reader would have noted the the strange dissimilarity with business accounting. It’s best first to verify that national accountants (with the exception of the Federal Reserve’s Z.1 flow of funds accounts of the United States) do it the way [...]

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Sources And Uses Of Funds

9 February 2012

In a recent post, I went into what is called the Transactions Flow Matrix. This is used heavily in Stock-Flow Consistent Modeling of the whole economy. The underlying theme is “everything comes from somewhere and goes somewhere, and there are no black holes”. I also mentioned about a Balance Sheet Matrix. What is it? Sectors [...]

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