Study on the application of input-output model in the research on currency circulation system

In this article we imitate the Leontief input-output model to study the issue of the multi-sector currency flows. Based on the detailed analysis on the composition of interdepartmental currency flows, we established a model which can simulate the real interdepartmental currency circulation process of the economic system by compiling a gridiron type table of currency flows and establishing a corresponding equations system. On the basis of fixed ratios of currency inflows, we deduced the horizontal input-output equations, and on the basis of fixed ratios of currency outflows, we deduced the vertical input-output equations. We also introduced the concepts of direct inflow coefficient, complete inflow coefficient, direct outflow coefficient and complete outflow coefficient to analyze the influence of single sector's currency revenue and expenditure to the total currency amount of the whole system. Using the model established in this paper, it is easy to study the quantitative relations between the gross currency flows of sectors and commercial banks' deposit and loan scale by means of the deduced input-output equations.