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Quantification of Revenue Induction and Expenditure Reflux in a Monetary Economy

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DOI: 10.4236/alamt.2015.51003    3,413 Downloads   3,882 Views   Citations
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ABSTRACT

In a monetary economy, expenditure induces revenue for each agent. We call this the revenue induction phenomenon. Moreover, in a special case, part of the expenditure by an agent returns as their own revenue. We call this the expenditure reflux phenomenon. Although the existence of these phenomena is known from the olden days, this paper aims to achieve a more precise quantification of them. We first derive the revenue induction formula through solving the partial money circulation equation. Then, for a special case, we derive the expenditure reflux formula. Furthermore, this paper defines the revenue induction coefficient and the expenditure reflux coefficient, which are the key concepts for understanding the two formulas, and examines their range.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

Miura, S. (2015) Quantification of Revenue Induction and Expenditure Reflux in a Monetary Economy. Advances in Linear Algebra & Matrix Theory, 5, 25-35. doi: 10.4236/alamt.2015.51003.

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