The Chimera of Macroeconomics

    In the beginning there was Value. We in economics are interested in value particularly associated with utilities, or “happiness” in the utilitarian language. Then, the opening question in discourse of economic value might well be, “What kinds of value are there in the beginning?” A fairly plausible answer will be, there are two kinds, i.e. raw ideas and raw materials . The former are of us, the humans, while the latter owing to Mother Nature.                In old times, raw ideas were created and processed into knowledge at each household. More publicly in modern times, the firm rents brain powers for research in search of raw ideas. When potentially useful, a set of raw ideas is patented and subsequently becomes a tradable asset , usually intermediate yet possibly final.              Again, the step-wise value-addition takes place gener...

  To anyone in  right  mind, savings are never for the purpose of throwing or giving things good and utile away. More specifically, we are “rational” (Gregory Mankiw) and “self-interested” (Adam Smith). Therefore, savings must be for our own benefit , or utility (M∙U in dimensions) of some kind. Why we save.  We save first and foremost because we are presupposed to decline and eventually fade away. In other words, we in earlier cycles of life shall save for the declining up to the eventuality. There are some other reasons as well (see below).   When we save . We can save only in those cycles of life when the hard-earned incomes outweigh demand for consumption. Where we save.  Some macroeconomists seem to think we save “liquidity” for the future under the mattress or somewhere else. That might be true in “Failed Nations” (to this tomorrow). Generally speaking, however, we in ordinary nations do not save inco...