Capital Flow Analysis is a sub-technique in the general field of flow of funds analysis. John Dawson, the leading expert on flow of funds analysis, said that “Flow of funds analysis is an undefined and partially hidden field of study”.

(See: “Flow of Funds Analysis: A Handbook for Practitioners“)

The flow of funds accounts themselves were developed in the 1940s and 1950s by Morris Copeland, an economist with the Federal Reserve Bank and were later expanded and polished by Stephen Taylor, the Chief of Flow-of-Funds of the Federal Reserve.

At that time, the compilation of flow of funds statistics was a branch of “social accounting”, which itself was a major sub-field of economic statistics. The initial technique followed guidelines of financial statements and therefore was oriented towards financial markets and people of the real world rather than theoretical economists.

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National flow of funds accounts are sets of statistics that show the financial holdings and liabilities of major sectors of the financial market.

The tables show changes in holdings and liabilities by sector. The data is also arranged by type of financial instrument. In the United States, the flow of funds accounts are compiled and maintained by the Federal Reserve Bank and published quarterly (Release Z.1).

The methods for presenting the flow of funds accounts were developed by Morris Copeland, an economist with the Federal Reserve Bank, in the 1940s and 1950s.

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