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Model Accounting

Model accounting: A approach.

  • Description
     
    Balance Sheet (Stocks):Stocks of assets have a plus sign.
     Stocks of liabilities have a minus sign.
     
    Transactions Matrix (Flows):All sources of funds appear with a plus sign - these are the incoming flows of money.
     All uses of funds appear with a minus sign.
  • Balance Sheet
     HouseholdsProductionGovernmentSum
    Money Stock+H0-H0
  • Transactions Matrix
    Equations which equalise demands & supplies:
    • [3.1] Cs = Cd
    • [3.2] Gs = Gd
    • [3.3] Ts = Td
    • [3.4] Ns = Nd
    Transaction Flow Equation:
    • [3.5] YD = W・Ns - Ts (Household disposable income)
    Behavioural Equations (Taxes demanded & consumption function):
    • [3.6] Td = ⍬ ・W・Ns (⍬ - taxes as a fixed proportion of money income)
    • [3.7a] (End Period 1 with no acc wealth) Cd = ⍺1 ・YD (⍺1 - some proportion of disposable income)
    • [3.7b] (End Period 2 — ∞) Cd = ⍺1 ・YD + ⍺2 ・Hh-1) (⍺1 - some proportion of disposable income) (⍺2 - some smaller proportion of the opening stock of money)
    Transaction Flow Equation:
    • [3.8] △Hs = Hs - Hs-1 = Gd - Td (Budget constraint of government)
    • [3.9] △Hh = Hh - Hh-1 = YD - Cd (Budget constraint of households)
    Expressions determining output & employment
    • [3.10] Y = Cs + Gs (The national income identity)
    • [3.11A] Y = W ・Nd (National income from the point of view of income)
    • [3.11] Nd = Y / W (or rather as (for employment))
    Exogenous variables
    • Gd (Fiscal policy)
    • ⍬ (Tax rate on taxable income)
    • W (Wage rate (fixed in this simple model)
     HouseholdsProductionGovernmentSum 
    -G(d)-£20     
    +Td£20     
    1Consumption-£20-Cd£20+Cs  £0"Kaleckian quantity adjustment"
    2Govt. Expenditures  £20+Gs-£20-Gd£0approach to market clearing.
    3[OUTPUT]   [Y]  £0 
    4Factor Income (Wages)£20+W・Ns-£20-W・Nd  £0 
    5Taxes-£20-Ts  £20+Td£0 
     Sum-£20-∆H£20-∆H£0+∆H£0△Hh = △Hs
  • Accounting Transactions
     Consumer Household AgentProducer Household AgentGovernment AgentSum or Balance 
    -G(d)£20AssetLiabilityAssetLiabilityAssetLiability  
    +Td£20        
    1Consumption £20£20   £0 
    2Govt. Expenditures  £20  £20£0 
    3Factor Income (Wages)£20  £20  £0 
    4Taxes £20  £20 £0 
     Sum£20£40£40£20£20£20£0 
     Equity (Stock)-£20£20£0£0△Hh = △Hs

Accounting Transactions: Programme Code Summary

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class Government(Agent):
    '''
    A government agent.
    '''

    # Government stimulus (expenditure).
    government_agent.liability = government_agent.Gd    

    # Government tax 'revenue' (from the Latin 'Revenire', to return) that is demanded by Government from ConsumerHouseholds.
    government_agent.asset = government_agent.Td
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class ProducerHousehold(Agent):
    '''
    A producer household agent.
    '''

    # Quadruple accounting system (Copeland) (Government supplied)
    producer_agent.Gs -= government_agent_supplied                          # 1
    producer_agent.W_Nd += government_agent_supplied                        # 2

    producer_agent.W_Nd -= government_agent_supplied                        # 3
    consumerHousehold_agent.W_Ns += government_agent_supplied               # 4

    # Quadruple accounting system (Copeland) (Consumer supplied)
    producer_agent.Cs -= consumer_agent_supplied                            # 1
    producer_agent.W_Nd += consumer_agent_supplied                          # 2

    producer_agent.W_Nd -= consumer_agent_supplied                          # 3
    consumerHousehold_agent.W_Ns += consumer_agent_supplied                 # 4
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class ConsumerHousehold(Agent):
    '''
    A consumer household agent.
    '''
    # 1. Pay taxes to government

    # Quadruple accounting system (Copeland)
    consumer_agent.W_Ns -= tax_to_pay                         # 1
    consumer_agent.Ts += tax_to_pay                           # 2

    consumer_agent.Ts -= tax_to_pay                           # 3
    government_agent.Td += tax_to_pay                         # 4

    # 2. Purchase consumption services from a ProducerHousehold and accumulate cash wealth (equity)

    # Quadruple accounting system (Copeland)
    consumer_agent.W_Ns -= total_consumption                  # 1
    consumer_agent.Cd += total_consumption                    # 2

    consumer_agent.Cd -= total_consumption                    # 3
    producerHousehold_agent.Cs += total_consumption           # 4