Intra-Sector Money-Flows
Diagrams

The Integrated Dynamic Money Flow (IDMF) analytical model differs conceptually from both the Flow-of-Funds accounts and Keynesian theory in that it uses a genuine money-flow perspective. Thus, for each transaction, instead of asking only "How does it affect the two parties' static individual balance sheets?" it also asks, "Where toes the money come from, where does it go, and what are the macroeconomic implications?" These are very important questions in the analysis of money creation and various credit flows -- such as those involved in the massive bailouts of 2008-2009.

The main macroeconomic money flows in the framework are shown in the overall circular flow of money diagram.

Unlike the Keynesian/NIPA macroeconomic equation, however, the basic IDMF macroeconomic equation is equally applicable in a micro perspective. The following diagrams illustrate the intra-sector structure of money flows that fit into the overall diagram. Estimating their empirical values presents a potentially rewarding research challenge.


 
(as single diagram)

 

(as single diagram)

 

(as single diagram)

Posted: May 16, 1998
Last revised: June 5, 2008
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