Richard Cantillon published his Essay on the Nature of Trade in General during 1730. Chapter eleven and chapter thirteen within that text described how farm production moved between property owners, farmers, and workers.
François Quesnay created a visual representation called the Tableau économique in 1758 which divided society into the Proprietary class, the Productive class, and the Sterile class. Landowners formed the Proprietary group while agricultural laborers made up the Productive group. Artisans and merchants comprised the Sterile class which generated no new value according to this framework.
Karl Marx expanded these concepts in the second volume of Das Kapital published by Penguin Classics in 1992 where he distinguished between simple reproduction where no growth occurred and expanded reproduction where more was produced than needed. In expanded reproduction part of the surplus value created by wage-labor was reinvested into production rather than hoarded or spent on consumption alone.
Richard Stone later developed the system for the United Nations and the Organisation for Economic Co-operation and Development after Frank Knight visualized the modern circular flow model in his 1933 publication titled The Economic Organization. John Maynard Keynes contributed significantly with his General Theory of Employment Interest and Money released in 1936. This evolution added government sectors foreign trade sectors and financial intermediaries to the original two-sector household and firm diagram.
When total leakages exceeded total injections income levels fell causing recession while conversely when injections surpassed leakages economic activity boomed until higher saving and taxation restored balance. A fictitious economy example showed $100 in savings $150 in taxes and $50 in imports matching $50 in investment $100 in government spending and $150 in exports totaling $300 each side.