The Circular Flow & Economic Growth

Households save a fraction of income. Savings flow through the financial market and return to firms as investment, growing the capital stock. Flow thickness, particle density, and box size all respond to the economy's state. Watch it converge to steady state.

Simulation
Speed1.0×
Period0 / 80
t = 0 Yₜ = Kₜ = Cₜ = Sₜ = d·Kₜ =
Production
Capital share (α)0.33
TFP (A)1.00
Labor (Lₜ)100
Capital Accumulation
Consumption share (c)0.75
Retention (d)0.95
Initial K₀50
Steady State
K*
Y*
C*
S*
Yₜ = A · Kₜᵅ · Lₜ¹⁻ᵅ
Kₜ₊₁ = d·Kₜ + Yₜ − Cₜ
Growth at t = 0
ΔK
ΔY
gᵧ
gₖ
% to K*
Legend
Households
Firms
Product Market
Factor Market
Financial Market

Monetary flow (clockwise)
Real flow (counter-clockwise)
Savings (Sₜ = Yₜ − Cₜ)
Investment (I = S)
Depreciation ((1−d)·Kₜ)
Display Options
Theme
☀️ Light / 🌙 Dark
Labels
Flow labels
Box mathematics
Icons