Do 'economic drainage basins' exist?

I remember reading an article about how a large proportion of tech venture capital ultimately makes its way into the pockets of Silicon Valley landlords.

Georgism posits as a general principle that a lot of money is captured as land rent.

This is an interesting thought.

Hydrology and economics both have stock/flow models. I don't know much of anything about hydrology, but you seem to be describing a directed acyclic graph with multiple sinks (i.e. nodes with no outgoing edges, "drainage basins"). The full water cycle is not explicitly modeled; there is no "edge" from a drainage basin to the atmosphere, and from the atmosphere back to the ground, to create a cycle.

In economics, there are many models of cyclical flows of commodities or money (acylic graphs are a special case of limited interest, as far as I know). Historically, the physiocrats were among the first to propose one (the "Tableau Economique"), to support their doctrine that the growth of national wealth was limited by agricultural output (which was, to a first approximation, true in their time).

The descendants of the Tableau are Leontief input-output models, which form the basis of national accounts (from which we get concepts like Gross Domestic Product). You can calculate the "leontief inverse" of an input-output matrix that lets you characterize how coupled different firms or sectors are in a given economy. Under assumptions of linear technology, these let you answer questions like: "How much would the total output, in dollars, of the steel sector have to increase to increase the total output of the automobile sector by $10 million dollars, relative to last year?"

If a sectors or firm has a relatively large multiplier, it means that it has a greater impact on the whole economic system than those with a smaller multiplier. When you hear claims like "building this factory would indirectly create 10k jobs", it is usually based on a regional input output model commissioned by a lobbying group or government agency.

I'm dimly aware these techniques have been used to model the diffusion of inflation from sector to sector, but I believe the state of the art involves convex optimization techniques that are beyond my ken.

"taxation" is the drainage, if we understand Marriner Eccles. http://neweconomicperspectives.org/2013/08/reading-between-t...

Industry based economic drainage zones maybe? Oil/gas industry ends up in Houston. Lobbyists end up in their state’s capitol or D.C., etc.

In a geological drainage basin, gravity is the constant. Not sure what is analogous in economics besides the obvious “money” but there are plenty of outliers to point out there whereas gravity doesn’t have as many.

Economist here.

Probably not, but I’m not really sure what you’re asking? What do you want this concept to do?

- do you want to know where people will migrate to?

- do you want to know how people will sort themselves based on some feature they possess?

Food and shelter would be the most likely contenders for it.

Regardless of what you do for a living we're all human and those two are major expenditures for 100% of the population.

I can't explain it but in my mind its sort of a map like the Collatz conjecture where you end up in a loop somewhere that always ends up being food, somewhere down the line.

All money flows to the top 1%rs.

Thats why giving money to the poorest people works.

Its called the trickle up effect..

as opposed to the now debunked trickle down effect, which was a invented theory of the 1%rs in an effort to speed up the trickle up effect to their own advantage.

The hydrology term you are looking for is catchment. I suspect an analogous economic "catchment", could be a company town, or a country who's economy is closed to the rest of the world.

An infinitesimal portion of the economy reaches me. The rest is waste.

I think the concept makes sense if you think in terms of e.g. big tech consolidation: Startups all over the land, eventually accumulating in the basins of Amazon/Alphabet/Meta.

I wonder if all money eventually return to the government, or leave the country. Since most trade is taxed by the government, in a recursive manner.

If by "money" it is meant value, then I wonder if money really can accumulate somewhere, since it is subject to devaluation.

Kind of? Think Chicago — it's hub for all sorts of agricultural commodities.

IMO: Wealth/money/capital is more like heat. Heat doesn't pool, it spreads (although it spreads faster through different materials.)

Maybe something like products or workers pool like water but I don't think wealth really does.