The Whole Economy Approach of the Input-Output Model

  • Fengquan LIU


In macroeconomy research that uses technological table, most studies have only considered a special
aspect. This paper develops an input-output model that extends to the whole economy by adding finance into
transaction table. This forms an integrated capital flow cycling system for whole economy. Economic growth is
used to reflect economic dynamic characteristics. Whole economy is divided into five subsystems. On the basis
of subsystem's balance sheet, we set up the simultaneous equation of whole economy. As part of the disposal
income, the new loan of the subsystems is affected by money supply badly and the income ratio is not stable. In
this paper, expenditure ratio of subsystems is used to solve the simultaneous equation. The subsystem's
balance sheets and the simultaneous equation can be applied to study fundamental economic issues effectively.


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How to Cite
LIU, Fengquan. The Whole Economy Approach of the Input-Output Model. Theoretical and Practical Research in the Economic Fields, [S.l.], v. 6, n. 1, p. 50-66, oct. 2016. ISSN 2068-7710. Available at: <>. Date accessed: 22 jan. 2022.
Theoretical and Practical Research in the Economic Fields


macroeconomy, input-output model, balance sheet, economic mechanism, fundamental economic issues, economic simulation experiment