Nature of Competition: The Product Market
The reason for the gross disarray of macroeconomics is the aggregate miscomprehension of the market “Adam Smith talked about” (quote from Larry Summers @.gov/blog, 2009). To be honest, the market is a model, a paradigm or a metaphor and that after a great abstraction. Consequently, the model is for application subject to numerous adaptations and adjustments. Furthermore, “the market” is for trade of goods and services, never for financial instruments. If anyone fuses “the market” of economics with “markets” of finance, you bet she is either an alchemist or a macroeconomist . While Finance is balancing, Economics creates. A CPA or not, n o accountant who is no macroeconomist would combine an income statement with a balance sheet. Metaphor and applications . Take the Newtonian gravity theory for e...