Transactions Flow Matrix
This matrix shows the flows of the economy - the financial transactions that occur in a single step and cause the stocks on the balance sheet to change.
How to Read This Table
- Rows: Each row represents a single, distinct type of transaction.
- Columns: Each column represents an agent (or sector) in the model's economy.
- + (Inflow): The agent in this column receives a payment.
- - (Outflow): The agent in this column makes a payment.
- (A, L): An entry in parentheses describes a change to the agent's balance sheet (Assets, Liabilities).
- E: Represents the agent's Net Worth or Equity.
- D / c: Represents a deposit in a current account.
- t: Represents a deposit in a time (savings or custody) account.
The sum of every single row is zero. This is the fundamental proof that the model is stock-flow consistent—no money is ever created or destroyed without a corresponding and equal entry elsewhere in the system.
| Transaction | Households | Firms | Private Bank | Fund Manager | Central Bank | Government | Total |
|---|---|---|---|---|---|---|---|
| 1. Government Spending (Firms) | +c | (+A: R, +L: D_f) | - (G_f) | 0 | |||
| 2. Government Transfers (Households) | +c | (+A: R, +L: D_h) | - (G_h) | 0 | |||
| 3. Household Consumption | -c / -cash | +c / +cash | 0 | ||||
| 4. Wage Payment | +c / +cash | -c / -cash | 0 | ||||
| 5. FIRM PROFIT DISTRIBUTION | |||||||
| A. PE Dividend (to Fund) | -c | (-L: D_f, +L: D_fm) | +t | 0 | |||
| B. PE Dividend (to Bank) | -c | (-L: D_f, +E) | 0 | ||||
| C. SRE Remittance (to Government) | -c | (-L: D_f, +L: D_g) | +c | 0 | |||
| 6. Tax Payment (Private) | -c | -c | (-L: D, +L: D_g) | -c | +c | 0 | |
| 7. Tax Payment (Bank) | (-A: R, -E) | +R | 0 | ||||
| 8. Interest on Deposits | (+t, +E) | (+t, +E) | (+L: D, -E) | +t | 0 | ||
| 9. Loan (Household) | (+c, -L) | (+A: L_h, +L: D_h) | 0 | ||||
| 10. Loan Repay. (Interest) | (-c, -E) | (-c, -E) | (-L: D, +E) | 0 | |||
| 11. Loan Repay. (Principal) | (-c, +L) | (-c, +L) | (-A: L, -L: D) | 0 | |||
| 12. Dividend Loan (Firm) | (+c, -L) | (+A: L_f_div, +L: D_f) | |||||
| 13. FIRM INITIAL PUBLIC OFFERING (IPO) EVENT | |||||||
| A. PE Capital Raising | (+t, -E_fee) | (+A: IPO, +L: D_f, +E_fee) | 0 | ||||
| B. SRE Privatisation | -E_all | (+A: IPO, +L: D_g, +E_fee) | +c | 0 | |||
| 14. Government Debt Issuance | (+A: B_b, +L: D_g) | (+A: B_cb, +L: D_g) | -L: B | 0 | |||
| 15. Debt (Bonds) Sale (Bank to FM) | (-A: B_b, +E) | (+A: B_fm, -t) | 0 | ||||
| 16. Debt (Bonds) Maturity (Private) | (-A: B_b, -L: D_g) | (+t, -A: B_fm) | (+L: B, -c) | 0 | |||
| 17. Debt Maturity (CB) | (-A: B_cb, -E) | +L: B | 0 | ||||
| 18. Coupon Payment (Private) | (+A: R, +E) | +t | - (BL_g) | 0 | |||
| 19. PUBLIC SECTOR INTERNAL ACCOUNTING & REMITTANCE | |||||||
| A. Gross Income (CB Coupon) | +E (Income) | -E (Expense) | 0 | ||||
| B. Gross Expense (Int. on Reserves) | (+A: R, +E) | -E (Expense) | 0 | ||||
| C. Net Profit Remittance | (+L: D_g) | (-A: R, -E) | +c | 0 | |||
| 20. Cash Withdrawal | +cash, -c | (-A: R, -L: D_h) | +R, -L: cash | 0 | |||
| 21. Fund Investment | (-c, +A: U) | (-L: D_h, +L: D_fm) | (+t, -L: U) | 0 | |||
| 22. Fund Management Fee | -E | (-L: D_fm, +L: D_fm_corp) | (+c_corp, -L: U) | 0 | |||
| 23. Custody Fee | (-L: D_fm, +E) | -t | 0 |
Key Transactions (Flows)
To request a full explanation of the key transactions flows, please send an email to info@giltedged.info.