[Pen-l] crisis and the three circuits of the global economy

[Gernot Koehler <gko15@xxxxxxxxxxx>]

My humble introductory text on global economics includes a diagram showing three interrelated circuits (circulatory systems) of the global economy, namely, a material flows (environmental) circuit, a goods, services and employment (real markets) circuit, and a financial circuit. Applied to the present crisis, one can observe that the screw-up in the global financial circuit affects the global real market circuit (e.g., IMF prediction of global slowdown). Further, one can observe that the present financial crisis, if it leads to a stagnation of global GDP growth, is good for the material flows (environmental) circuit, insofar as a stagnation of global GDP growth means less waste of natural resources and less destruction of the environment. (blue tears, green cheers)

Gernot

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