The Chimera of Macroeconomics

  For the sake of convenience, we copy from somewhere else. (Quote) Some macroeconomists claim that households preferably hoard money as a store of value when the interest rate, or the aggregate level of interest rates, is at the zero lower bound (ZLB). Fortunately, in the first place, throughout history all market rates have never at the same time been at or below ZLB, nominal or effective.            Now, let us think about plausibility of ZLB. When households are unusually wary about their incomes in the near future, they may keep all the incremental liquidity from, for instance, the fiscal helicopter drop ( ΔM 1 ). Fortunately in the second place, there is a silver lining: the fiscal or monetary authority would seldom bar the household from selling a part of their asset portfolio for still more liquidity ( ΔM 2 ) when the fiscal drop does not attenuate wariness to a satisfactory extent. As they act upon the unvaried prosp...

  Hated by the former US president Harry S. Truman, the economy has two hands. Where there is a “take,” there is a “give.” Where there is no “give,” there is no “take.” More generally, where there is an action, there is a reaction and vice versa . Therefore, there in the economy is no such thing as “equilibrium” or ceteris paribus . In other words, an “organism in equilibrium” must be an oxymoron in the worse sense; a life on the Isle of the Dead?             In the first place, none of us in the hat of “the household” of economics would like to be put to “equilibrium” in any sense of the term.   The Concern: “AI and Job Loss ” Don’t worry, be even happier!             Where there is demand for AI, there will eventually be supply of AI. Where there is no demand for AI, there is absolutely no supply of AI in and from the right mind. Scenario #1 . Suppose AI’s...