Money-flow Computations

The standard input-output relationships are complemented by monetary stock-flow data. The flow of money is described as a Markov chain. Its ergodic state is equivalent to the economic equilibrium. The definition of the latter requires thus neither labour-theoretic nor marginalist assumptions. The Fisher equation for the velocity of money circulation can be expressed in this input-output context. The average velocity and its dispersion are then determined. The theorems are illustrated on a 5×5 sector Hungarian matrix.