The circular-flow approach is decidedly Neoclassical, and suffers from many problems which traditional Austrians would notice. The circular-flow diagram’s greatest problem is, in fact, its circularity ...

The Circular Flow Diagram has dominated economic thought for over a century. Yet, all along we’ve known its shortcomings: over-aggregation, static capital, instantaneous production, and homogeneous ...

Leakage is an economic term that describes capital or income that escapes an economy or system in the context of a circular flow of income model. It results in a gap between supply and demand.

Paradox of Thrift: Definition in Economics, Examples, and Criticisms. By. James Chen. Full Bio. ... Circular Flow Economic Model . Keynes helped revive the circular flow model of the economy.