1. A significant portion of this chapter is based on Chapter 3 of Brian P. Simpson, Trade Cycle Theory: A Market Process Perspective (Ann Arbor, MI: Bell & Howell Information and Learning Company, 2000) and
2. Brian Simpson, “Money, Banking, and the Business Cycle,” audio recording (Irvine, CA: Second Renaissance, Inc., 2005).
3. For a detailed critique of the contemporary method of aggregate economic accounting and a detailed description of the better method described here, see George Reisman, Capitalism: A Treatise on Economics (Ottawa, IL: Jameson Books, 1996), pp. 673–715. This material is used as the basis for my discussion.
4. The value for GDP was obtained from the Federal Reserve Bank of St. Louis, FRED database, series ID GDPA. The value was obtained February 18, 2013. Data for GNR are based on the total wage payments in the economy and the gross receipts for corporations, partnerships, and nonfarm proprietorships. For the sources of the gross receipts data, see the same sources for the 2010 gross receipts data given in chapter 2 in the discussion of total spending in the economy. The data used from these sources conform to data obtained for earlier years for gross business receipts from the Statistical Abstract of the United States and are used for the purpose of including gross income from ongoing business activities. Operating revenue would be a better figure to use to estimate the revenues of businesses because gross receipts include revenues from sources that are not the principal economic activities of the business, such as interest. Operating revenues include only revenues earned from the principal activities of the business. Gross receipts were used based on data availability and should not change any of the conclusions drawn from the data. For more on this topic, see Jay Cochran III, “Of Contracts and the Katallaxy: Measuring the Extent of the Market, 1919–1939,” The Review of Austrian Economics vol. 17, no. 4 (2004), pp. 407–466. See especially p. 442, note 44. For the source of the wage data, see the source of the wage data in chapter 2 in connection with the discussion of total spending in the economy in 2010. As I said in chapter 2, to calculate total wage payments the wage rates of government workers are assumed to be the same as the wage rates of workers in the private sector. Although this is not true, it should not change any conclusions drawn from the GNR data.
5. Gross receipts for 2007 for corporations, partnerships, and nonfarm proprietorships were obtained from the US Census Bureau, Statistical Abstract of the United States: 2012, 131st ed. (Washington, DC, 2011), p. 491. GDP and wage data for 2007 were obtained from the same sources as the 2010 data.