Flow Of Funds - FOF

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DEFINITION

A set of accounts that is used to follow the flow of money within various sectors of an economy. Specifically, the account analyzes economic data on borrowing, lending and investment throughout sectors like households, businesses and farms.

INVESTOPEDIA EXPLAINS

The accounts are tracked and analyzed by a country's central bank. In the United States, this is done by the Federal Reserve Bank, and the findings are provided approximately 10 weeks after the end of a quarter.

The FOF accounts are used primarily as an economy-wide performance indicator. The data from the FOF accounts can be compared to prior data to analyze the financial strength of the economy at a certain time and to see where the economy may go in the future. The accounts can also be used by governments to formulate monetary and fiscal policy.


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