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A consistency framework for macroeconomic analysis

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  • Easterly, William

Abstract

Macroeconomic consistency is the requirement that budget constraints be observed for all participants in the economy. This paper presents the elements of a macroeconomic accounting framework in current prices. The framework is based on five accounts, corresponding to the following macro identities: (1) national accounts identity; (2) government identity; (3) balance of payments identity; (4) monetary identity; and (5) nonfinancial private sector identity. A basic consistency framework requires that all of these identities be simultaneously satisfied. These would be the miniumum elements of a consistency framework. The paper also indicates where further disaggregation might be useful. It presents the individual accounts first, and then integrates them through a matrix of income expenditure, saving, and asset and liability accumulation. Examples of this framework are presented for Colombia and Zimbabwe.

Suggested Citation

  • Easterly, William, 1989. "A consistency framework for macroeconomic analysis," Policy Research Working Paper Series 234, The World Bank.
    • Handle: RePEc:wbk:wbrwps:234
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    Citations

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    Cited by:

    1. Khadr, Ali & Schmidt-Hebbel, Klaus, 1989. "A framework for macroeconomic consistency for Zimbabwe," Policy Research Working Paper Series 310, The World Bank.
    2. Marshall, Jorge & Schmidt-Hebbel, Klaus, 1989. "Economic and policy determinants of public sector deficits," Policy Research Working Paper Series 321, The World Bank.
    3. Tarp, Finn, 1994. "De makroøkonomiske reformer i teoretisk belysning [Macroeconomic Reforms in Theoretical Context]," MPRA Paper 64206, University Library of Munich, Germany.
    4. Kannapiran, Chinna A., 2001. "Macroeconomic impacts of export commodity price subsidy in Papua New Guinea," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(3), pages 1-22.
    5. Christian A. Emini & Hippolyte Fofack, 2004. "A financial social accounting matrix for the integrated macroeconomic model for poverty analysis : application to Cameroon with a fixed-price multiplier analysis," Policy Research Working Paper Series 3219, The World Bank.
    6. Wodon, Quentin T., 1999. "Growth, poverty, and inequality : a regional panel for Bangladesh," Policy Research Working Paper Series 2072, The World Bank.
    7. Vavouras, Ioannis S., 1999. "Public Sector Deficits: Their Economic and Policy Determinants in the Case of Greece," Journal of Policy Modeling, Elsevier, vol. 21(1), pages 89-100, January.
    8. Islam, Roumeen & Wetzel, Deborah L., 1991. "The macroeconomics of public sector deficits : the case of Ghana," Policy Research Working Paper Series 672, The World Bank.

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