The Chimera of Macroeconomics

  Worldwide except for a couple of renowned cities, the three captioned words are generally regarded of a certain kind, yet another kind than utility, economy, efficiency and effectiveness. First of all they are “nominal” (U ∙ m), as opposed to “real and substantive” (M ∙ U) of the latter. This fact (read: truth) is particularly opined by the Nobel laurates Paul Samuelson and William Nordhaus : “Money is useless until we get rid of it” (2010, p. 458; i talics added).              Second of all, “Money, Banking and Finance” when in Classical works would stay “stationary” under the fame of “equilibrium” in stock, balance, and peace; later days, the Keynesians call the same the “steady state” (each in T 0 ). All these are opposed to all those creative powers in the keep of running, flowing, destructing, creating, “nominally destructing yet really creating,” progressing, and growing (all in T -1 ).    ...

  The reason for the gross disarray of   macroeconomics   is the aggregate miscomprehension of the market “Adam Smith talked about” (quote from Larry Summers @.gov/blog, 2009).              To be honest, the market is a model, a paradigm or a metaphor and that after a great abstraction. Consequently, the model is for application subject to numerous adaptations and adjustments. Furthermore, “the market” is for trade of goods and services, never for financial instruments. If anyone fuses “the market” of economics with “markets” of finance, you bet she is either an alchemist or a macroeconomist .              While Finance is balancing, Economics creates. A  CPA or not, n o accountant who is no macroeconomist would combine an income statement with a balance sheet.   Metaphor and applications . Take the Newtonian gravity theory for e...