Circulatory axiom

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A simple economic cycle as described by the cycle axiom .

In economics, the axiom of the cycle says that the sum of all inflows of a pole is equal to the sum of all outflows. The circulatory axiom plays an important role in the circulatory model . It is used to represent economic payment transactions between the different parties (government, household and company). In the simplest case, this is a static, closed economy without a state (see figure).

The idea of ​​the cycle goes back to the main representative of the Physiocrats Francois Quesnay (1694–1774).

meaning

The cycle axiom defines a closed cycle and forms the construction principle of the national accounts . It initially serves the purely descriptive ex-post analysis of the economic relationships between the economic subjects of an economy on an aggregated level ( cycle analysis ).

The axiom can be used to represent basic identities of a cycle model in the form of equations.

Perspectives

Considered ex post , the axiom of the cycle says that the inflows and outflows of money supplies (measured in monetary units) must always be the same between economic operators.

Considered ex ante , the cycle axiom is based on a "planning" in which the future inflows and outflows of the economic operators are (approximately) planned. It does not say anything about the real inflows and outflows of money (measured in monetary units) between economic operators. For example, the terms “supply” and “demand” for goods can be formulated as planned quantities: the total supply of goods corresponds to the total planned sales of goods including the planned total income , the total demand for goods corresponds to the total planned purchases of goods including the planned total expenditure .

Individual evidence

  1. ↑ Reiner Clement, Wiltrud Terlau, Manfred Kiy: Applied macroeconomics: macroeconomics, economic policy and sustainable development with case studies . Vahlen; Edition: 5th, completely revised edition. (March 14, 2013). ISBN 978-3800644803 . Page 26.
  2. ↑ Circular thought - article at Makroo.de
  3. ^ Circulation analysis - definition in the Gabler Wirtschaftslexikon
  4. ↑ Arnold Heertje, Heinz-Dieter Wenzel: Fundamentals of Economics . Jumper; Edition: 7th, revised. u. exp. 2008 edition (September 10, 2008). ISBN 978-3540850403 . Page 186.
  5. ↑ Wolfgang Stützel (1953): Paradoxa of the money and competition economy. Aalen: Scientia 1979, pp. 183-199

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