Velocity Wanted: A Trade-off in Eternity

  

“It was many and many a year ago, In a kingdom by the sea, Those two maidens there lived whom you may know By the name of Annabel and Lee” (sorry for the so many unauthorized variations).

             Both are presupposed to live for 125 years in the kingdom; the royal economy is eternally stuck to “the natural level of output,” or g= 0 in arithmetic of Annabel and Lee. In 25 years after legitimate conception and subsequent birth, the two maidens begin to take different routes of life: the Cambridge way, viz., π= g+ m= m, vs the Princeton way, namely, π= g+ 2m= 2m.

Note:  The Cambridge Quantity equation by J.R. Hicks (1937): Md= k∙P∙Y                        

          The money demand by William Baumol from Princeton (1952): Md= (b∙ P∙Y/ 2i)1/2.

          The difference is exponential, i.e. M vs M2. Such a difference is geometric and possibly explosive.

 

For the Sake of Illustration. Annabel inflates at 1% year after year, while Lee at 2% per annum repeatedly.

At the Time of Reckoning in Front of the River

1)     Annabel: (1.01)100= 2.7

2)     Lee: (1.02)100= 7.2

 

The Keynesian “Speculative” Contest

             Contestant #1: A 125 years of time belongs to the long run, if not eternal.

             Contestant #2: A 125 years is also ephemeral vis-à-vis eternal.

             Contestant #3: A 100 years aka century belongs to the short run, if not ephemeral.

             Contestant #4: A century of adult life is absolutely a short run, if relative to 125 years

             Contestant #5: A century is eternal for every purpose of ephemeral life.

             Contestant #6: The difference between 2.7 and 7.2 is really in name only.

             Contestant #7: The difference is merely nominally nominal.

             Contestant #8: The difference is just a disorder of magnitude.

             Contestant #9: The difference is surprisingly of an order of magnitude.

             Contestant #10: The difference is theoretically and statistically significant.                                                   And yes, it really truly is real.

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