(Lonergan’s) channels of circulation replace the overall dominance claimed for general equilibrium theory, but they reveal the conditions under which partial equilibria can exist. … More positively, the channels account for booms and slumps, for inflation and deflation, for changed rates of profit, for the attraction found in a favorable balance of trade, the relief given by deficit spending, and the variant provided by multinational corporations and their opposition to the welfare state. (CWL15, 17)
In a Bloomberg News piece, authored by Rich Miller and dated October 11, 2022, Miller quotes Alan Blinder’s remarks about A.W. “Bill” Phiilps, the originator of the Phillips Curve:
This guy was as inter-disciplinary as you can be. He was a practical engineer as a young man, with a wrench in his hand, and then later in his life an academic who took those ideas to economics and in particular to Keynesian economics. He had a very mechanical view of the macro economy. He built this machine where water flowed through clear plastic tubes, like income and expenditure in the economy. People spend money that becomes income to other people, and they spend money that becomes income to other people, and so on. The machine is now at the Reserve Bank of New Zealand. (Blinder re Phillips)
He also had a colorful history. He won a Member of the Order of the British Empire award for bravery handling a machine gun during World War II. He was captured by the Japanese and became a prisoner of war, during which time, among other things, he learned Chinese from his fellow prisoners. (Blinder re Phillips)