Disaggregated Economic Accounts

We develop and analyze a new system of disaggregated economic accounts. The system breaks down national accounting positions into bilateral flows between consistently defined groups of consumers (“consumer cells”), groups of producers (“producer cells”), the government, and the rest of the world. We disaggregate the full circular flow of money, including consumer spending, labor compensation, firm surplus, foreign trade, taxes, and trade in intermediates. The measurement is comprehensive, so that the disaggregated flows add up to national aggregates and fulfill all national accounting identities. We implement the disaggregated system for small region-by-industry cells in Denmark. We present new facts on a “triangular trade” pattern across regions: spending by rural consumers disproportionately flows into urban regions, urban consumers spend more abroad, and export revenue mostly flows into rural regions. Building on a general equilibrium model with many consumer and producer cells, we illustrate that the structure of disaggregated economic accounts shapes the propagation of shocks: fiscal policy is more effective when targeted at rural consumers, and urban consumers gain the most from foreign trade.