The Chimera of Macroeconomics

  Imagine we get incremental money ( Δ M ) from the “ helicopter drop ,” so to speak. What would take place soonest? 1)      The Fisherian way: We spend Δ M as soon as possible because “ Money is of no use until it is spent ” (1930, p.5). A silver lining nevertheless, the increment ( Δ M ) is never excrement. 2)      The Keynesian way: Our “preference” is to hoard the additional “ liquidity ” ( Δ M ) in small rectangular solid pieces of paper or “thin-airy” demand deposits for fear of the “ liquidity trap ” (1936). 3)      The Hicksian way: The real GDP momentarily shoots up as in M= k ∙ P ∙ Y (1937) with P “sticky” and k “constant.” 4)      The Baumolite way: There will be inflation through a double channel; one the increment of Fisherian money of no use ( Δ M ) and the other the “doubling up” of the velocity of spending ( ΔV ) (1952). 5)      The Mankiw style i...

  Opening a text book on Principles of Economics, one of the first things we come across is “Demand.” Fact one, demand is for marginal benefit, or utility per unit of the product. Fact two, the value of utility is accounted for in the sovereign currency unit . Fact three, the demand exists with no regard to the Supply and a price. The price would be the “opportunity cost” of grabbing the unit of good or service .                Fact four, “Demand” is periodic (T -1 , or per period) because no household would buy any product once and for good. This is taken for granted and rarely specified in textbooks. Incidentally, each and every one of us has by creation blind spots in our visionary system. Consequently, we in general and macroeconomists in particular often miss the periodicity out, with or without FOMO.              Now let us put “Demand for Money”...

  Theory from Science. Scientific theories are all about causality: A cause results in the effect. If we set the end, we might find a means to have the end obtained. If a self-claimed scientist, abstract or empirical, gets the causality wrong, he shall convincingly confuse innocent citizens, domestic or alien. As such, we may call “reverse causation” the first sin of science. All Correlations are Not Equal . In practice of concurrence , most anything is correlated nearly everything else. In that sense, “correlation” is a matter of degree . I the Meanest do not   only share the same period of time with a little less mean family but also with all different kinds of celebs. Alas, I cannot with the closest related and most honorable parents of mine!              On the contrary, causality of different direction results in a great difference in kind , such as a plan of highest feasibility versus a pipedream. In gener...