INJECTIONS-LEAKAGES MODEL:

A macroeconomic model that balances non-consumption expenditures on production (injections) and non-consumption uses of income (leakages) that is used to identify the equilibrium level of, and analyze disruptions to, aggregate production and income. The injections-leakages model is based on the principles of Keynesian economics and provides an alternative to the standard aggregate expenditures (Keynesian cross) analysis. The three injections included in the model are investment expenditures, government purchases, and exports. The three leakages included in the model are saving, taxes, and imports. Three variations are the two-sector injections-leakages model (or saving-investment model), three-sector injections-leakages model, and four-sector injections-leakages model.
The injections-leakages model provides an alternative to the more common Keynesian cross, aggregate expenditures-aggregate production model of the macroeconomy. Both models provide essentially the same analysis and are essentially "two sides of the same coin." The key difference between the two models is that consumption is explicitly eliminated from the injections-leakages variation. Whereas the Keynesian cross builds on the consumption function, the injections-leakages model builds on the saving function',500,400)">saving function.