transactions flow matrix

Income ≠ Expenditure?

6 October 2012

I like Steve Keen. He is terrific in debunking economics! In a recent debate with Paul Krugman, Keen put Krugman on the defensive and exposed his weaknesses. Krugman obviously didn’t want to accept defeat and tried to escape with the help of comments in the comments section of Nick Rowe’s blog (that DSGE is not […]


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. […]


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 […]


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 […]


The Transactions Flow Matrix

9 January 2012

Why is GDP defined as C+I+G+… and how is it related to national income, expenditure etc and that of each sector of an economy such as that of households? The following table (redrawn by myself) taken from the book Monetary Economics by Wynne Godley and Marc Lavoie gives an idea on how to go about measuring […]


Z.1, Q3-2011

8 December 2011

The Federal Reserve released the Flow of Funds Accounts of the United States today. The Flow of Funds Accounts provides one of the best snapshot of an economy. In an article appropriately titled ‘No one saw this coming’ – or did they? (see the full paper here), Dirk Bezemer correctly recognizes that the Economics profession’s ignorance […]


Financial Crisis And Flow Of Funds

11 November 2011

Marc Lavoie forwarded me the European Central Bank’s Monthly Bulletin, October 2011 which has a section on TARGET2 and the European monetary system. I have had good discussions with him on emails to nail the TARGET2 operations so it is good to see the conclusions being verified in publications. I am waiting to write a long […]