Procrustean Art of Backtracking: “Equation of William Baumol”
According to a Korean maxim in Chinese characters, “The darkest is right under the lamppost” ( 燈下不明 ). Often times, the answer to an age-old trouble is of simple or rather naïve ideas around us for long, sometimes even longer than the trouble in hands. Getting out of the popular framework of reference tangled with vested interests, we often find an incredibly short answer as in: 1) “ Eppur si muove .” 2) “The Emperor in naked!” 3) The “equation of monetary inventory” by William Baumol (1952) is all that we might refer to at the very beginning of an economic downturn . To “keep things simple,” we copy the following from somewhere else: ( Quote ) The household has to conduct cost-benefit analysis for the decision how much money to hold ( M d ...