The Chimera of Macroeconomics

  Believers in of “ ineffective demand ” have imagined such otherworldly ideas as “paradox of thrift” to “ secular stagnation .”   Paradox of thrift. According to Thomas Malthus , we are presupposed to throw whatever unconsumed into the sea  sometimes also called “ Saltwater .”              Cómo es eso ? With the savings from consumption, the rest of us in the rational mind have so many things to invest in. You know what, savings equal investment when exogenous to macroeconomics or outside of Cambridge. There out there in this world is no such thing as a "paradox of thrift." On the contrary, as Daron Acemoglu and James Robinson world-famously verify what fails nations is a lack of motivation to thriftiness or indolence in saving.              As we are more than well aware, the cost of the present ( C ) is the future ( I ). We as nobody would n...

  Macroeconomists are fond of referring to “outside shocks.”              The rest of us would agree that oil shocks , a pandemic , a volcanic eruption , an outbreak of a major war and the like are exogenous to the macro-economy. However, we are not quite sure about a “major breakdown of the financial system” (to Ben Bernanke) or the so-called “ monetary shock ” (ubiquitous in macroeconomics).              In modern times, as opposed to the Mercantilism era, money is generally endogenous; more specifically, “ money supply ” is the business of “the financial system”; or, it’s the matter of monetary base + credit policy !              Truthfully, the financial system is endogenous of the nation; but it is by conception exogenous to the womb of economics. A lining in the cloud: Macroeconomics is by...