CHAPTER THIRTEEN. Secrets Hidden by Two-Dimensionality: The Economy as a Hydraulic Machine

A long-standing tradition presents economic activity in terms of the flow of fluids. This metaphor lies behind a small but influential practice of hydraulic modelling in economics. Yet turning the metaphor into a three-dimensional hydraulic model of the economic system entails making numerous and detailed commitments about the analogy between hydraulics and the economy. The most famous 3-D model in economics is probably the Phillips machine, the central object of this paper.