Tuesday, January 15, 2013

Merijn Knibbe — Base money basics





Real-World Economics Review Blog
Base money basics
Merijn Knibbe | Wageningen University, Netherlands

1 comment:

The Arthurian said...

Oh, Tom! In the lower left of the graphic I saw formulas like =sum(b1:b3) and so I thought Merijn had worked something out in a spreadsheet. I like spreadsheets.

I went immediately to the link and read the post twice. But there was no spreadsheet and no link to a spreadsheet and I just got more and more confused. But I think I finally figured out how to read the graphic.

Example: Item B in the lower left, M3-Money, includes the cells labeled B1 and B2 and B3, which is "Private sector" "M-3 money" originating as "Coins" and "Banknotes" and "Deposit money".

Example 2: Lower-left "C: deposit money" equals the sum of all the cells with a "C"-prefix label in them; that is, "Deposit money" held by "Government" and by "Banks", and by the "Private sector" as both "M-3 money" and "Financial capital".

This method of understanding the graphic seems to work okay, except for Lower Left "A: base money" which tries to add cells "ai:a8" when it should probably be adding "a1:a8"... or actually "a1:a9" as in the table the label "A7" appears twice and one of those should be an "A9" I think.

Sound right to you?

Trouble is, it's ass-backwards from every spreadsheet that I've ever used!