The common error of common sense: an essential rectification of the accounting approach
AbstractThe present paper takes the explanatory superiority of the integrated monetary approach for granted. It will be demonstrated that the accounting approach could do even better provided it frees itself from theoretically ill-founded notions like GDP and other artifacts of the equilibrium approach. National accounting as such does not provide a model of the economy but is the numerical reflex of the underlying theory. It is this theory that will be scrutinized, rectified and ultimately replaced in the following. The formal point of reference is ‘the integrated approach to credit, money, income, production and wealth’ of Godley and Lavoie.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 43196.
Date of creation: 20 Aug 2012
Date of revision:
new framework of concepts; structure-centric; axiom set; primacy of theory; income; profit; distributed profit; money; flow; residual; transaction matrix; general complementarity;
Other versions of this item:
- Egmont Kakarot-Handtke, 2012. "The Common Error of Common Sense: An Essential Rectification of the Accounting Approach," Economics Working Paper Archive wp_731, Levy Economics Institute.
- E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
- B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
This paper has been announced in the following NEP Reports:
- NEP-ACC-2013-01-07 (Accounting & Auditing)
- NEP-ALL-2013-01-07 (All new papers)
- NEP-HME-2013-01-07 (Heterodox Microeconomics)
- NEP-HPE-2013-01-07 (History & Philosophy of Economics)
- NEP-MAC-2013-01-07 (Macroeconomics)
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