The Chimera of Macroeconomics

    Suppose the product “widget” to be traded in the market of Mini-polis with a certain limited number of households. We assume the accounting period is the month. We additionally imagine for the sake of convenience the demand curve and the supply curve as illustrated in textbooks.              We certainly have the “equilibrium price” which would clear the market in the month of April. We might call such a price as “the price of market average,” which we can figure out ex post if in reality. At any rate, the market has been “cleared.” Or, the market has ended up “in equilibrium” except for this regret: The “equilibrium price” will surely be different in May as long as the market is awake.   What Opportunity? In the marketplace, there are prices. In the market, there is “the price.” There is one commonality among a price in reality, the price of imagination and all the other different prices as realis...

  Back home after spending the afternoon hours in the library, Alicia faces a dishful of sushi prepared by loving Mom. Alicia, the rational, never grabs several pieces handful. She takes piece by piece, each in its entirety. She never leaves uneaten half, not to mention one thousandth (1/ 1,000) thereof. In economics jargon, the piece as in the dish is the “marginal” unit.   There is no question that she is crazy for the very first unit of sushi. The question: Is there any cost taking the first? Yes of course, nothing good comes for free. Yet, the cost of preparing sushi is irrelevant because it is already “sunk.” The relevancy comprises of gaining weight, mouth smell, getting many things around dirty and the feeling of fullness. Wait; does her time at dinner come for free? Never, the time (duration) is the most valuable currency for all of us with limited time of life. Time is the most critical cost because she has many other things to do at each “moment” of life. Is her...