Note to System Dynamicists

The methods and apparatus of System Dynamics can easily be modified and applied to Lonergan’s Diagram of Rates of Flow.

I would add that the aims and limitations of macroeconomics (that is, the circulation analysis presented here) make the use of a diagram particularly helpful, …  For its basic terms are defined by their functional relations.  (CWL 15, 54)

Please refer to the Diagram of Rates of Flow on page 55 of  CWL 15.  The Diagram is a Representation or Model of the explanatory interconnections and interdependencies of functional monetary flows in the always-current, purely-relational, dynamic, economic process.  The Diagram represents a Macroeconomic Field Theory, whose equations relating functional elements among themselves are given on the pages immediately preceding the Diagram.  The terms and relations of the equations may be of immense help to the studious system dynamicist.  In the alternative names below, the words “Model” or “Model of” may be substituted for “Diagram” or “Diagram of”.  Depending on one’s momentary interest and point of view, this schematic may alternatively be called:

  • The Diagram of Two Operative Circuits Connected by Operative Crossovers
  • The Diagram of Functional Monetary Interdependencies
  • The Diagram of the Relations of Monetary Functions Among Themselves
  • The Configuration of Monetary Conditions
  • The Diagram of Operative Functional Flows of Products, Payments, and Financings
  • The Diagram of Monetary Channels
  • The Diagram of Monetary Transfers
  • The Diagram of Circulations
  • The Diagram of the Monetary Correlates of the Productive Process
  • The Diagram of Interdependent, Implicitly-Defining, Mutually-Conditioning Velocitous Functionings
  • The Diagram of Explanatory Interconnections
  • The Double-Circuited, Credit-Centered Diagram which Sublates, Supervenes, and Replaces the Single-Circuit, Credit-Centered Diagram of Macroeconomics Textbooks
  • The Functional Framework
  • (Colloquially) The Way the Process Works
  • (Colloquially, because of its shape) Lonergan’s Baseball Diamond

 

The diagram prescinds from a) trade imbalances, b) government surpluses and deficits, and c) other collective surpluses and deficits, which can be imaged by superposed circuits lacking vital c’O’ and c”O” flows.