The circular flow of income is an economic model that illustrates the movement of money, goods, and services between different sectors of the economy. It demonstrates how income circulates through ...

In the study of economics, one learns the circular flow of the economy between firms and households. This post, however, presents another circular flow model based on capital and labor. (It is a ...

The Circular Flow Diagram has dominated economic thought for over a century. Yet, all along we’ve known its shortcomings: over-aggregation, static capital, ...

The argument is based on a simple circular flow model of a pure credit economy, where production takes time. In this economy, positive growth rates are necessary in the long run in order to enable ...

In Binswanger (2009) it was shown that in a simple circular flow model of a pure credit economy, positive growth rates are necessary in the long run in order to enable firms to make profits in the ...