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1.4 Income and Expenditure

Consumer expenditure for a representative agent are the sum of factor earnings and tax revenue, net the cost of investment, public sector output and net capital outflows:

Capital flows in the base year are represented by Br in this expression, and in a counterfactual equilibrium these are held fixed and denominated in terms of the numeraire price index, the consumer price level in region n (USA).


October 23, 1998

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