The Chimera of Macroeconomics

  According to conventional wisdom, the time flies like an arrow. That might be very true in Eternity. In other words, the time dimension (T for time) and the space dimension (L for length, L 2 for the venue, L 3 for the space, L 4 for the venue’s square, L 6 for the double space, and the like) are mutually compatible and substitutable.              However, the rest of us still do not know whether the time can be raised to the second order (T 2 , time’s square) or the third order (T 3 time’s cubic).   Marginal Propensity to Consume                       Eternal Income Accounting (in trillion thalers per block from the River)       Soul Monetary Income “Consumption” “Saving” Spending MPC* APC* Discarding APD* Blk #1 Jane, Post Mortem...

  Mr. Robinson is the economy all by himself in Crusoe Island. As a result, life is at the same time home and in the macro-economy. Economics. He has no opportunity whatsoever to engage in trade which needs two sides, the credit and the debit. Consequentially, “the market” is down with “trade after specialization.” Nevertheless, he is rational enough always and everywhere to mind efficiency, or “economy” if we will.             On one hand, the time (read: the period, never the point) is his currency. On the other hand in Island, there is no alternative in accounting for efficiency to measuring his utility acquired per hora (M ∙ U ∙ T -1 in dimensions). In the economy or as for individual economy:             Principle 1 . Time and space are limited .             Principle 2 . Nothing utile comes for free. ...

  Thinking at the Margin (from Gregory Maniw) . We think of each and every economic issue always stepwise in terms of small-yet-recognizable units. Put it differently, we care about such units because managing unrecognizable matters would be sheer “waste of time.” We the un-famous would never mind, for instance, what the answer is to the problem: 3 micrometers +5 nanoseconds= ? , and the like, effectively everywhere in macroeconomics.              A case in point: Both terms of the equation “at the margin,” M d - (k ∙ P ∙ Y)= ? ; or “What is M d (at this moment) minus ( - ) the k fraction constantly of the nominal GDP ( P ∙ Y hoc   anno ) ?              With the above said, at any rate, we usually “think at the margin” and choose the largest “bang for the buck” of all goods, services, assets, things, matters and so on so forth. Unit of Account . In...

  When the base is twisted, the building must be vulnerable to an outside shock. Notwithstanding, the sun will rise next morning and shine all over the ground, with or without the building.     Macroeconomics Fiascos: Resident Aliens 1.      The investors in charge of “ I ” 2.      The central bankers in charge of “ r ” and “ M ” 3.      Secretary of the Treasury in charge of “ G ” in general and “ Δ G ” in particular 4.      The Capitol Hill or the Parliament in charge of “ T ” in general and “ ΔT ” in particular “ Consumption ” 1.      Always and everywhere for “ luxuries ” only; never for Investment of any sense 2.      Absolutely forbidden from multiplying “ Going Fiscal ” 1.      “Consumption without production” is possible as needed, particularly in the short run. (Note: there is a “constant” added to t...