The Chimera of Macroeconomics

  According to conventional wisdom, the time flies like an arrow. That might be very true in Eternity. In other words, the time dimension (T for time) and the space dimension (L for length, L 2 for the venue, L 3 for the space, L 4 for the venue’s square, L 6 for the double space, and the like) are mutually compatible and substitutable.              However, the rest of us still do not know whether the time can be raised to the second order (T 2 , time’s square) or the third order (T 3 time’s cubic).   Marginal Propensity to Consume                       Eternal Income Accounting (in trillion thalers per block from the River)       Soul Monetary Income “Consumption” “Saving” Spending MPC* APC* Discarding APD* Blk #1 Jane, Post Mortem...

  Quiz with the unit dollar up for grabs: What would be the word for winning in the competitive war to become California’s Air Hub between LAX (LA international airport) SFO (SF airport)? Hopefully, nobody other than me would come forward with the word “ connectivity ” as the answer.             Suppose LAX has 2,000 ( N 1 ) flight connections (to other airports) while SFO 1,000 ( N 2 ). On the other hand, “connectivity” means a bi -lateral relationship between two spoke airports via the hub. Now, what will be the aggregate number of connectivity through LAX vs. through SFO?             Most of us would have the answer: C lax =N 1 ∙ (N 1 - 1)/ 2= 2,000 x 1999/ 2 vs. C sfo = 1,000 x 999/ 2 . To generalize, C= N ∙ (N-1)/ 2 . Then on, we can make a speedy guess that C ≒ N 2 / 2 when N is larger than, say, 100. This is the network effect , sometimes called “Metcalfe’...

  The first virtue in life is efficiency, or utility per hour (M ∙ U ∙ T -1 ). The second is fertility, or reproduction of the utile-for-limited-time. As a consequence, wasting time in general and concerning about the futile in particular become the first two vices of all. Depending upon the school of economic thoughts, incidentally, “the moment” or “the extraterrestrial” may or may not be a concern.             In economics, we call as good the kind of utility visible while as service the other kind of utility invisible. Alas, some intellectual macroeconomists, honestly or otherwise, miss so many intangible things of utility; on the flipside, others try to build and explain infertile models. How Utile to Whom? Philosophy of life is personal. First, the degree of caring for the present vs. the future is a matter of individual choice. In other words, the “time value of money” varies across people and changes over time of th...

  Hated by the former US president Harry S. Truman, the economy has two hands. Where there is a “take,” there is a “give.” Where there is no “give,” there is no “take.” More generally, where there is an action, there is a reaction and vice versa . Therefore, there in the economy is no such thing as “equilibrium” or ceteris paribus . In other words, an “organism in equilibrium” must be an oxymoron in the worse sense; a life on the Isle of the Dead?             In the first place, none of us in the hat of “the household” of economics would like to be put to “equilibrium” in any sense of the term.   The Concern: “AI and Job Loss ” Don’t worry, be even happier!             Where there is demand for AI, there will eventually be supply of AI. Where there is no demand for AI, there is absolutely no supply of AI in and from the right mind. Scenario #1 . Suppose AI’s...

  Intelligence, Human vs Artificial            What would the most typical difference between RI (for real intelligence) and AI be? That’s a great question subject to answers of all differences depending on whom we ask the question of. 1)      A macroeconomist : There is a “nominal” difference, if any, in that the two never die in “the short run” but fade away in “the long run.” 2)      A scientist : The one is human and organic, the other artificial and mechanic In other words, RI evolves while AI revolves. 3)      A humanist : The one is exciting and gets excited, while the other is boring but never gets bored. 4)      A troubleshooter : The one goes to a clinic, the other to a mechanic. 5)      A layperson like the rest of us: Are you kidding? 6)      A doomsayer : RI’s will certainly suffer fro...

  Mr. Robinson is the economy all by himself in Crusoe Island. As a result, life is at the same time home and in the macro-economy. Economics. He has no opportunity whatsoever to engage in trade which needs two sides, the credit and the debit. Consequentially, “the market” is down with “trade after specialization.” Nevertheless, he is rational enough always and everywhere to mind efficiency, or “economy” if we will.             On one hand, the time (read: the period, never the point) is his currency. On the other hand in Island, there is no alternative in accounting for efficiency to measuring his utility acquired per hora (M ∙ U ∙ T -1 in dimensions). In the economy or as for individual economy:             Principle 1 . Time and space are limited .             Principle 2 . Nothing utile comes for free. ...