Footnote for the 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)

For context of the above Diagram of Rates of Flow the reader may refer to page 55 of  CWL 15. Also see on this website Insight into the Baseball Diamond; discovery and Implementation.

Depending on one’s momentary interest and point of view, this schematic may alternatively be called:

  • The Diagram of Two Operative Monetary Circuits Connected by Operative Monetary Crossovers
  • The Diagram of Functional Monetary Interdependencies
  • The Configuration of Monetary Conditionings
  • The Diagram of Operative Functional Flows of Products, Payments, and Financings
  • The Diagram of Monetary Channels
  • The Diagram of Velocitous Monetary Transfers
  • The Diagram of the Monetary Correlates of the Velocitous Process of Production and Sale
  • The Diagram of Interdependent, Implicitly-Defining, Mutually-Conditioning Velocitous Functionings
  • The Double-Circuited, Credit-Centered Diagram which Sublates, Supervenes, and Replaces the Single-Circuit, Credit-Centered Diagram of Macroeconomics Textbooks
  • The Functional Framework of Rates (Velocities) of Functional Flows
  • (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. See CWL 15, 162-76

The foregoing Section 13 (Rates of payment and transfer) defined two circuits of outlay, income, expenditure, receipts, a pair of crossovers, and four pairs of transfers between the redistributive function and the demand and supply functions. The present section is concerned to watch the circuits in motion, and more particularly to inquire into the conditions of their acceleration. The inquiry involves three steps: first, one asks what is the possibility of circuit acceleration when the crossovers balance and each of the four pairs of transfers cancel, so that the quantity of money in each of the circuits remains constant. [that is, when (S’-s’O’), (S”-s”O”), (D’-s’I’), (D”-s”I”), and G are each zero.] Secondly, we ask what is the possibility of circuit acceleration when the crossovers balance, transfers to the demand functions balance, but transfers to the supply functions do not [that is, when (S’-s’O’) (S”-s”O”), are positive or negative but (D”-s’I’), (D”-s”I”) and G remain zero; thirdly, one asks what happens if the crossovers or the transfers to demand do not cancel [that is when none of these is zero.  (CWL 15, 56)