Thank you all for starting an interesting discussion.  I often still teach intro to macro with a circular flow with plumbing and was interested in the two citations I have so far seen in this list regarding bathtub models.  The concept of leaks and injections is so intuitive for the students to understand: exports, government spending, and investment are the injections; net taxes, imports, and saving being the leaks. I start with the very nice circular flow in Baumol and Blinder's intro to macro text.  We often add a pipe from "rest of world" to the US banking system, and discuss the possibility that credit could make US household savings negative, and discuss the implications.  

So here's the question: given that this is such an intuitive way to learn about macroeconomics, why is a serious circular flow (with pipes and all) such a rarity in modern teaching?  My teacher Lance Taylor was often speaking of leaks and injections in the 1990s, so he must have seen something like it in his training as an economist.  Did this perspective have a rise and fall?  For what reason?

Marie Christine Duggan
Keene State College
New Hampshire
  


-----Original Message-----
From: Societies for the History of Economics on behalf of GM Ambrosi
Sent: Tue 3/25/2014 9:56 AM
To: [log in to unmask]
Subject: Re: [SHOE] Circular flow
 
If we search for the earliest mentioning of economic circular flow I suggest
Heraclitus of Ephesus(fl.500 BC):

"all things are an exchange for fire and fire for all things,
like goods for gold and gold for goods"

Seaford, R. _Money and the Early Greek Mind -- Homer, Philosophy, Tragedy_
Cambridge University Press, 2004, p.12.
Seaford gives some thought to the question of the means of exchange on
p.237, note 43

Michael Ambrosi


2014-03-25 2:20 GMT+02:00 michael perelman <[log in to unmask]>:

>
>
> Is it too much of a stretch to attribute a crude version of the circular
> flow to Petty's Treatise.  Nicholas T., who knows everything, can tell me
> if I am wrong.
>
> --
>  Michael Perelman
> Economics Department
> California State University
> Chico, CA
> 95929
>
> 530 898 5321
> fax 530 898 5901
> http://michaelperelman.wordpress.com
>



-- 
Prof. em. Dr. Dr.h.c. G.M. Ambrosi
Jean Monnet Professor "ad personam"
University of Trier,  FB IV VWL
D-54286 Trier
mobil: 0049-178-286 2703