The Chimera of Macroeconomics

  There are one commonality and numerous differences between the two gentlemen of fame. Differences first: 1)      American vs. British 2)      In the 19 th vs. in the 20 th century 3)      Salesman all across the nation vs. Economist at Cambridge 4)      …… 5)      …… 6)      …… 7)      So on 8)      So forth Only commonality next:              ***Snake oil vendor (by profession or otherwise, wittingly or not)   Don’t get us wrong: J.R. Hicks’ “equation of Cambridge Quantity” is nothing but ineffective amalgam of Finance (about ownership of financial assets at a moment in time, T 0 ) and Economic activities ( per annum , T -1 ). In Economics jargon, the former is a “stock” and the latter a “flow.” The two of them can be associated, ...

Amazingly outlandish is the equation proposed by J. R. Hicks in his 1937 article titled “ Mr. Keynes and …” He is pointblank that J. M. Keynes was by profession neither a researcher nor an economist. No wonder there was in the particular room of 1940s in the U.S., there was only one non- Keynesian who happened to be a Commentator named J. M. Keynes.              Now let us put Professor Hicks’ equation on the table: M d = k ∙ P ∙ Y . where M d represents “liquidity preference” aka “ money demand ,” k a constant and P ∙ Y  the “ nominal GDP .” Keynesian or not, the equation is a great counterexample of “Sense and Sensibility.” Nonsense No. 1. Misnomer . Money is anything but to be demanded. There is neither a reason nor a way for the household to “demand” money. None would like to “buy” money with money as the medium of exchange in all trade above ground. If ever, it would be extremely uneconomic for any house...