Peter Cooper — Sectoral Financial Balances in Relation to the Income-Expenditure Model

This is a follow-up to a recent post on the income-expenditure (IE) model. It is at a similar introductory level except that some knowledge is assumed from the earlier post. Those unfamiliar with the model might find it helpful to read the earlier post before this one. This post has two purposes. The first is to graph the IE model. The second is to relate the IE model to the sectoral financial balances (SFB) model and illustrate its applications. The SFB model has been discussed in the blogosphere by a number of modern monetary theorists, including Bill Mitchell, Robert Parenteau, Eric Tymoigne,Daniel Conceicao and Scott Fullwiler, prompted by a post of Paul Krugman's which contained a useful diagram.

heteconomist.com
Sectoral Financial Balances in Relation to the Income-Expenditure Model
Peter Cooper