The Chimera of Macroeconomics

  The nature comprises of five dimensions: three dimensions in space (L 3 , L for length), one in time (T 1 for the period of time) and one in mass (M 1 for mass of all differences). Blessedly we can observe through the visionary system what is happening in front of us across space (L -3 ) and over time (T -1 ). (Negativity for the purpose of accounting only)                Physicists would say that we with the system capture the “real images” of the actual things. When we wear lenses, on the contrary, we capture the “virtual images,” which can possibly be dubbed “nominal” if in macroeconomics. Real , virtual or nominal , we recognize the nature in five dimensions. C'est la vie réelle!        In the Puppet Show . We see the imitations of the real things moving across the space and over the time. The mass is imaginary but the space of moving and the time of lapsing are real . Those in the Cave . For the sake of con...

  When macroeconomists refer to “empirical science,” they might unwittingly think of Eternity. Take the “ Cambridge Quantity equation ” M= k ∙ I (John R. Hicks, 1937) of liquidity preference ( M d for “ money demand ” in macroeconomics) for example. Then, we juxtapose for the sake of comparison the same with to the popular proposition “ The money supply M is an exogenous policy variable chosen by a central bank, such as the Federal Reserve ” ( Gregory Mankiw , Macroeconomics ); “money supply” is often denoted as M s . By definition, both demand and supply are as at a moment (T 0 in the time dimension).              Let us step into the so-called “money market.” What if the market is not in “ equilibrium ,” or M s ≠ M d = k ∙ I ? Oh, that’s a peanut: The “I ” (for the “nominal” GDP) as the only “endogenous free variable” momentarily varies so as to push the money market back in equilibrium. Got that? The Truth ...