3 
Matrix C: 
1 
2 
3 
4 
5 
6 
Imports 
Ind. 
Taxes 
Direct 
Taxes 
Saving 
distrib. 
Profits 
Wages and 
Salaries 
1. 
0 
0 
0 
0 
0 
0 
2. 
0 
0 
0 
0 
0 
0 
3.House 
Construction 
• 
• 
• 
• 
• 
• 
4.Consumption 
durables 
• 
• 
, 
• 
# 
5. " non-dur. 
• 
• 
• 
• 
• 
• 
6. " Services 
• 
• 
• 
• 
• 
• 
The matrix C is 
bordered 
with 
two zero 
rows. Pre 
-multiplying it 
with a'AB we obtain a vector of flows from the consumption goods 
business sector: 
a'ABC = vector of imports, ind. and direct taxes, saving, 
distributed profits, wages and salaries. 
Post-multiplying this with B we get a further round, and so on. 
In the end we have to add up the two series, outflows from 
business firms and outflows from households. This yields the 
total offsets against the primary expenditure. The sum of the 
series can be written 
a. A r (BC) n vector of flows from business 
O 
a'A^T (BC) B vector of flows from households 
The convergence requires that the coefficients in the matrices 
A,B,C are all smaller than unity.