Research Objectives

IEA's conceptual framework provides the basis for conceptual and empirical research to:

1. Promote revision of the Flow of Funds Accounts (FoFA) to reflect the Integrated Dynamic Money-Flow (IDMF) conceptual framework.

2. Use the revised FoFA concepts to develop better data on the economy's Financial Balance -- its total supply and demand for credit -- both for more effective macroeconomic analysis and as a basis for more effectively coordinating government fiscal and monetary policy with developments in the private credit market.

3. Determine more precisely the growth-trend of the economy's full-employment potential (capacity) GDP, and its productivity and labor-force components.

4. Further improve IEA's full-employment balanced-growth model of the structurally-normal ratios of key macro variables to actual GDP (or, where analytically appropriate, to other growth-trend variables) -- including better understanding of any long-run trends in these structural norms.

5. Develop better understanding of the short- and long-run factors affecting the current trend value of the Money Demand Ratio (M1/GDP), as a basis for more precise management of money growth and economic growth.

6. Analyze the potential benefits and costs of a "100% reserve" monetary system, and the most appropriate means of transition to this system.

7. Analyze the causes and dynamics of inflation, with particular attention to the role of interest rates, taxes, technological development, economic concentration, patents and trademarks -- and the ways in which monopolistic "administered" pricing decisions and collective-bargaining wage decisions would probably be affected by a credible and effective policy of maintaining stable full-employment economic growth.

8. Help to improve the conceptual framework of the National Income and Product Accounts to facilitate more systematic integration with the Flow of Funds Accounts.

9. Help to develop a special measure of GDP which:
   • can be more appropriately integrated with financial data in the Flow of Funds Accounts;
     
   • more adequately reflects the actual structure and operation of the economy;
     
   • more adequately reflects the non-monetary environmental and other "external" costs and benefits of economic activity;
     
   • more adequately reflects people's actual "standard of living."

Research collaboration in these areas is actively welcomed.