The Chimera of Macroeconomics

  Believers in of “ ineffective demand ” have imagined such otherworldly ideas as “paradox of thrift” to “ secular stagnation .”   Paradox of thrift. According to Thomas Malthus , we are presupposed to throw whatever unconsumed into the sea  sometimes also called “ Saltwater .”              Cómo es eso ? With the savings from consumption, the rest of us in the rational mind have so many things to invest in. You know what, savings equal investment when exogenous to macroeconomics or outside of Cambridge. There out there in this world is no such thing as a "paradox of thrift." On the contrary, as Daron Acemoglu and James Robinson world-famously verify what fails nations is a lack of motivation to thriftiness or indolence in saving.              As we are more than well aware, the cost of the present ( C ) is the future ( I ). We as nobody would n...

  Macroeconomists are fond of referring to “outside shocks.”              The rest of us would agree that oil shocks , a pandemic , a volcanic eruption , an outbreak of a major war and the like are exogenous to the macro-economy. However, we are not quite sure about a “major breakdown of the financial system” (to Ben Bernanke) or the so-called “ monetary shock ” (ubiquitous in macroeconomics).              In modern times, as opposed to the Mercantilism era, money is generally endogenous; more specifically, “ money supply ” is the business of “the financial system”; or, it’s the matter of monetary base + credit policy !              Truthfully, the financial system is endogenous of the nation; but it is by conception exogenous to the womb of economics. A lining in the cloud: Macroeconomics is by...

  The first virtue in life is efficiency, or utility per hour (M ∙ U ∙ T -1 ). The second is fertility, or reproduction of the utile-for-limited-time. As a consequence, wasting time in general and concerning about the futile in particular become the first two vices of all. Depending upon the school of economic thoughts, incidentally, “the moment” or “the extraterrestrial” may or may not be a concern.             In economics, we call as good the kind of utility visible while as service the other kind of utility invisible. Alas, some intellectual macroeconomists, honestly or otherwise, miss so many intangible things of utility; on the flipside, others try to build and explain infertile models. How Utile to Whom? Philosophy of life is personal. First, the degree of caring for the present vs. the future is a matter of individual choice. In other words, the “time value of money” varies across people and changes over time of th...

  In the year 2525 in the two “autonomous” cities of Anglo-America, everywhere endogenous was everything except for the public spending ( G in macroeconomics), the communal investment ( I ), and the MPC ( ΔC/ ΔY ). Once upon a time in the South, on the other Earthly side, there were so many “commonwealths” where everything but the government and fiscal dis-spending ( ----- G ) was endogenous.              To begin, we vary a couple of definitions. First, Y= C+ I + G , all in “nominal.” Second, there are two kinds of constancy, that is, “fixed” yet discretional and everywhere “constant.”   A Downturn and Fiscal Policy . When the GDP ( Y ) was expected to go on as ordinary (in the year 2525), the fiscal outlays ( G ) were constant, or “fixed” as often assumed “for the sake of simplicity.” The GDI ( I in macroeconomics) was “fixed.” The MPC, defined as the cross-scenario gap in consumption vis-à-vis the gap in GDP,...