Monday, January 20, 2014

IV.2: The circular-flow model

This turns into something pretty much like the standard circular-flow model that's in any mainstream macroeconomics textbook, but it starts from the view developed earlier in the book of payments for value added being grounded in physical processes. And at the end, it draws on the mechanics of banking from Part I to explain how the circular-flow model can account for variations in aggregate demand, and even generate them itself.

Video here.

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