The American Economist, Vol. 64, No. 1 (March 2019), pp. 45-59 (15 pages) Closed-system circular flow models have been ubiquitous in economics for at least half a century. Because these models account ...

To put it plainly, we need one another. The economy is interrelated — as captured by the circular flow diagram, a core economic model. We need businesses. Businesses create jobs for households and ...