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The Optimum of Grossness in Flow-of-Funds Accounts

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The Optimum of Grossness in Flow-of-Funds Accounts This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: The Flow-of Funds Approach to Social Accounting Volume Author/Editor: Conference on Research in Income and Wealth Volume Publisher: Princeton University Press Volume ISBN: 0-870-14182-1 Volume URL: http://www.nber.org/books/unkn62-1 Publication Date: 1962 Chapter Title: The Optimum of Grossness in Flow-of-Funds Accounts Chapter Author: Morris Mendelson Chapter URL: http://www.nber.org/chapters/c2044 Chapter pages in book: (p. 411 - 430) The Optimum of Grossness in Flow-of-Funds Accounts MORRIS MENDELSON UNIVERSITY OF PENNSYLVANIA IN A very real sense this paper is premature, and I make no pretense about being original. Until the flow-of-funds accounts have been used more analytically, we will not even know which net flows are essential, to say nothing of gross flows. Little analysis has been undertaken so far, and there has been little demand for flows grosser than those already available. Undoubtedly, some work is in progress, and the people involved may feel the lack of grossness with varying degrees of acuteness. I It should be clear that in the flow-of-funds accounts there are changes other than the introduction of gross flows to which I am inclined to attach higher priorities. In some instances, grossing is incidental to the introduction of other desirable changes. Since this paper is not concerned with the need for grossness per Se, i shall not refrain from discussing the cases in which it is actually incidental. One of the most important such cases, really a variant of grossing, is the disaggregation of financial claims by maturities. In this paper, however, I shall not attempt to assign priorities to the various proposed changes. I intend to confine the discussion to the question• of which flows would contribute substantially more to our understanding of the economy if they were gross

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