How much money flows between companies, consumers, etc?
October 17, 2011 8:47 AM Subscribe
How much money flows between companies, consumers, etc?
This might be a fundamental question but are there any books/stats on how much money flows between industries and corporations and consumers?
For example, if I'm going to get my vehicle repaired, as a consumer I have to go to the mechanic's shop and pay for labor and parts.
The mechanic's shop has to pay the owner of the parts shop. The parts shop in turn has to find suppliers for their parts.
Overall, all these transactions involve the flow of money.
For the auto industry for example, there is of course the flow of money from consumers to purchase a car or do repairs (lets say 100 billion dollars in america for example purposes). There is also the flow of money from auto companies and their suppliers of car radios, leather seats, etc.
It would be so cool to have a big but detailed picture for a given industry (auto, health, insurance, entertainment) how and where money all the money is flowing. Preferably a visualization but data is ok too as I can graph it.
Just to get a general picture, not for individual companies really.
Just looking at the yellow pages and seeing all the companies listed there made me think if there is an interesting way to see them from a monetary flow perspective.
Somebody else out there must think this is very interesting.
This might be a fundamental question but are there any books/stats on how much money flows between industries and corporations and consumers?
For example, if I'm going to get my vehicle repaired, as a consumer I have to go to the mechanic's shop and pay for labor and parts.
The mechanic's shop has to pay the owner of the parts shop. The parts shop in turn has to find suppliers for their parts.
Overall, all these transactions involve the flow of money.
For the auto industry for example, there is of course the flow of money from consumers to purchase a car or do repairs (lets say 100 billion dollars in america for example purposes). There is also the flow of money from auto companies and their suppliers of car radios, leather seats, etc.
It would be so cool to have a big but detailed picture for a given industry (auto, health, insurance, entertainment) how and where money all the money is flowing. Preferably a visualization but data is ok too as I can graph it.
Just to get a general picture, not for individual companies really.
Just looking at the yellow pages and seeing all the companies listed there made me think if there is an interesting way to see them from a monetary flow perspective.
Somebody else out there must think this is very interesting.
Related but not exactly what you are looking for: velocity of money. Current data is here.
posted by procrastination at 9:14 AM on October 17, 2011
posted by procrastination at 9:14 AM on October 17, 2011
It sounds like you're basically asking about GDP, i.e. the sum total of all of the end-user transactions in the economy.
Say you get your transmission repaired for $1,500. That includes both the labor cost--which goes to the mechanic and is spent on other things--and the cost of the parts, going all the way back to the ore purchased from the mining company who dug it out of the earth. Or whatever. Every player in that series of transactions from you back to the miner skims off a little bit of the price as profit, but passes much of the rest on as costs. But those other transactions aren't counted towards GDP, because they're simply further subdivisions of your initial $1,500. The money taken as profits or wages goes on to spur new transactions, which are counted in their own right. This is the source of the circular flow model so loved by Keynesians.
But if you're looking for more specific details about what money goes where, you're basically asking for the inner details of a given industry or company's cost structure, i.e. how much they spend on parts and labor, and where that money goes. There's really no good way of getting this information, as it goes beyond even what publicly-traded corporations are required to disclose by the SEC. It's one of the reasons some economists are a bit skeptical about having the circular flow model do all that much theoretical heavy lifting: it seems somehow intuitive on a macro level, but to have enough information to actually do math with it, you basically need to have information about every transaction in the economy, which is obviously impossible. Marx ran into the same problem with his labor theory of value, i.e. to know the value of anything, you have to know the value of everything. So we can sort of do impressionistic patterns, but we can't actually come up with the map you seem to be looking for.
posted by valkyryn at 11:42 AM on October 17, 2011
Say you get your transmission repaired for $1,500. That includes both the labor cost--which goes to the mechanic and is spent on other things--and the cost of the parts, going all the way back to the ore purchased from the mining company who dug it out of the earth. Or whatever. Every player in that series of transactions from you back to the miner skims off a little bit of the price as profit, but passes much of the rest on as costs. But those other transactions aren't counted towards GDP, because they're simply further subdivisions of your initial $1,500. The money taken as profits or wages goes on to spur new transactions, which are counted in their own right. This is the source of the circular flow model so loved by Keynesians.
But if you're looking for more specific details about what money goes where, you're basically asking for the inner details of a given industry or company's cost structure, i.e. how much they spend on parts and labor, and where that money goes. There's really no good way of getting this information, as it goes beyond even what publicly-traded corporations are required to disclose by the SEC. It's one of the reasons some economists are a bit skeptical about having the circular flow model do all that much theoretical heavy lifting: it seems somehow intuitive on a macro level, but to have enough information to actually do math with it, you basically need to have information about every transaction in the economy, which is obviously impossible. Marx ran into the same problem with his labor theory of value, i.e. to know the value of anything, you have to know the value of everything. So we can sort of do impressionistic patterns, but we can't actually come up with the map you seem to be looking for.
posted by valkyryn at 11:42 AM on October 17, 2011
I wonder if there have been some good studies in countries with a VAT? In those countries, there's actual tax paperwork to be filled out for every item that a company purchases. Presumably this paperwork isn't public, but maybe somebody releases statistical samples.
posted by miyabo at 2:02 PM on October 17, 2011 [1 favorite]
posted by miyabo at 2:02 PM on October 17, 2011 [1 favorite]
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posted by chavenet at 8:54 AM on October 17, 2011