Fallacy of Composition: AS-AD, a Model or Not 02

 

Again, where there is yin (陰, yin) there is yang (陽, yang). The invisible hand, the market and the economy always and everywhere have two hands. In the first place, “The purpose of production (+) is consumption (-)” (to Adam Smith). Where there is a giving hand (+) there is a receiving hand (-) and vice versa. Each and all of all the kinds of matters, except for “liquidity” in Cambridge, never die or fade away “into the thin air.”

             Each and all entities, but for a nonentity (0) or an Eternity (∞), have two ends, or two hands if we will, one vs the other, south vs north, east vs west or the like. Surefire (明若觀火; 明若观火, míng ruò guān huǒ), the principle of mass conservation!

 

12) Effects of Sticky Wages. Sometimes in macroeconomics, the sticky wage is named as the culprit of the sticky price. True or false, good or bad, or right or wrong, where there is a wage payer there must be a wage receiver.

             When the individual wage is stickily too high, the individual employer must reduce the production as implied by “macroeconomic doomsayers,” so to speak. From the perspective of the individual laborer the earned income shall be much too much to be spent in the accounting year or quarter if we please.

             If exogenous to Cambridge, the same would hold true as for the collective wages all across the nation. Therefore, in a certain quarter the gross national income shall be too large to be spent in the quarter. The extra income, or AD– AS>0, or “too effective aggregate demand” if they will, must be “thrown into the salt water” in the front (from Thomas Malthus, 1836).

             On the contrary, the economy when endogenous would’ve only one hand! Where in Cambridge is the Fallacy of Composition? Never and nowhere!

 

13) Effects of Sticky Prices.

             Ditto, for the purpose of Saving Private Time.

             Again, time (T for time dimension) is the most universal and the most precious currency of each and all of us when in Here on Earth except for in Cambridge of course. The rest of us shall go for the sake of saving time; each and all have at most 24 hours a day and 7 days a week.

 

“In and Out” Cambridge. In the first place endogenous of Cambridge, the stature of models would vary all along the abscissa (L^-1).

             In the second place, you can have as many macrocosms per quarter as you wish; for instance, Macrocosm A, Macro B, Mc. C, M.D. and the like, and that “so indefinitely many.” Macro-economies jumping all around in FY 2025 to “In the Year 2525”!

             Rush Limbaugh would talk about, “See I Told You So”: The economy much like the tree generally fluctuates down (+) or grows up (-) along the spatial line (L^-1); and, particularly on “so many pages” (L^-2) of the macroeconomics textbooks in Cambridge.  

             Every rose when out of Cambridge has its thorns: So do each and all equilibrium. Ms. Yin, Don’t Forget to Remember Mr. Yang! Keep him everywhere in mind. That’s the obligation, annoying may it be. Like or not, Juliet never forgot Romeo From Here to Eternity.