Tag Archives: income-expenditure identity

We have seen that the ‘income-expenditure model’ combines key macro identities (introduced in parts 7 and 15) with particular behavioral assumptions to provide a theory of income determination (considered in parts 16 and 18). The behavioral assumptions relate to causation. The causation envisaged in the income-expenditure model has implications for the sectoral balances, some of which are the focus of the present post.... heteconomistShort & Simple 19 – Sectoral Balances in a Closed,...

In this and upcoming parts of the series, we will look in a little more detail at the ‘income-expenditure model’. The foundations of the model have been introduced in the previous two parts (here and here)…. heteconomistShort & Simple 18 – Income Determination in a Closed EconomyPeter Cooper