Why is economics hard?

Posted by William A. Manning On 8/25/2011 10:20:00 AM

Because its hard to imagine how capital, or a "dollar", flows through the economy.

Some people try to explain that capital flows in a linear fashion, this is partly true.

Some people try to explain that capital flow in a circular fashion, and this too is partly true.

Other people try to explain that capital flows as if from the center of a wagon wheel, this is partly true also.

Try this.

Think of the economy as a sphere with wagon wheels making up the entire structure.  Exterior walls and all of the "solid" interior walls are interconnected.  

This is kind of hard to imagine, isn't it?

Try explaining it, not a micro but, on a macro scale.


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