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 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 ...

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 ...