Chapter

The “Architecture” of Capital Accounting

Edited by Charles R. Hulten

in A New Architecture for the U.S. National Accounts

Published by University of Chicago Press

Published in print July 2006 | ISBN: 9780226410845
Published online February 2013 | e-ISBN: 9780226410876 | DOI: http://dx.doi.org/10.7208/chicago/9780226410876.003.0006
The “Architecture” of Capital Accounting

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This chapter discusses the design principles of a set of income and product accounts based on the circular flow model (CFM) of payments and goods. It explains that the analysis of capital within the context of the CFM also yields insights into specific accounting practices. The CMF treats production and consumption as separate economic activities and it provides flexible infrastructure for incorporating theoretical developments that improve the value of the accounts to the various user communities. This chapter recommends moving current accounting practice toward the CFM structure, particularly in the field of national income and wealth accounting.

Keywords: income and product accounts; circular flow model; accounting practices; production; consumption; national income accounting; wealth accounting

Chapter.  10108 words.  Illustrated.

Subjects: Economic Systems

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