The Whole Economy Approach of the Input-Output Model
The Whole Economy Approach of the Input-Output Model

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

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