The Chimera of Macroeconomics

  A few premises from the ABC of economics:   1)      Demand is for the marginal benefit at the marginal cost of a price in a defined currency unit. 2)      Supply is for the marginal benefit of a price at the marginal cost of production in the currency unit. 3)      A price is set between the buyer aka demander and the seller aka supplier. 4)      “The price” of “equilibrium” is imaginary and by definition metaphorical.   Amazingly, graceful or surprising, macroeconomists propose as follows: 1)      <Figure 13-4> As Wages Rise, Workers May Work Fewer Hours. … Because at higher wages workers can afford more leisure … (Samuelson and Nordhaus, Economics , 19 th ed., p.252).   2)      The essence of the time-allocation problem is the trade-off between leisure and consumption (Gregory Mankiw, Principles of Economics , 6 th e...

  Q1. Are economics and macroeconomics “complementary”? Q2. Are economists and macroeconomists “substitutive”? Q3. Are “the market” and “the economy” on the same boat? Q4. Is “monetary income” in tradeoff against “leisure”?   The answer to Q1, conceptually “Yes,” but practically “No.” More specifically, the vast majority of macroeconomists get “the market” wrong, the very foundation of economics. Often they go even antagonistic to the market.     “No” to Q2. In general, a competent economist makes a good macroeconomist or the other way around. At any rate, most influential economists are mostly macroeconomists. The answer to Q3 is “Up for grabs.” It depends who you ask the question of. Some say the market is to blame for each and every macroeconomic trouble; others would point fingers at the government in general and the central bank in particular, instead, implying a healthy economy only with wholesome markets.    Ditto to Q4. Really fanta...