Letter to The Bureau of Economic Analysis

The Functional Macroeconomic Dynamics Collaborative

Website: Bernard Lonergan’s Functional Macroeconomic Dynamics

https://functionalmacroeconomics.com

functionalmacroeconomics@gmail.com

 

Brian C. Moyer, Director

Bureau of Economic Analysis (BEA)

4600 Silver Hill Road

Washington, DC 20233

Dear Mr. Moyer,

Presently the Bureau of Economic Analysis (BEA) publishes three general versions of the National Income and Product Accounts (NIPA).

  1. Gross Domestic Product, Current $
  2. Gross Domestic Income by Type of Income; National Income by Type of Income; and, National Income by Sector …; Current $)
  3. Gross Value Added by Sector; Current $)

Would it be possible for the BEA staff to develop a fourth which would be explanatory of the production-and-exchange process?

The three present descriptive reports compile the measurements of flows in the descriptive profit-and-loss categories of accountants and managers.  Our requested fourth version would be an arrangement of aggregate interdependent functional flows of products and money into an explanatory form?  To quote two of our own sources:

Now as the statistical approach differs from the descriptive, the analytic differs from both.  Out of endless classificatory possibilities it selects not the one sanctioned by ordinary speech nor again the one sanctioned by facility of measurement but the one that most rapidly yields terms which can be defined by the functional interrelations in which they stand. [Bernard Lonergan]

For Lonergan, (conventional) accounting generally denotes an enterprise within common sense which uses descriptive, as contrasted with explanatory terms.  Insofar as that is true, the accountant’s unity is not an adequate index for the normative, explanatory analysis of the productive process. [CWL 15, 26, ftnt 26]

The overall economic process is constituted by interdependent, mutually conditioning, mutually defining, functional flows of products and money.  Our requested fourth arrangement would arrange interdependent flows into a scientific explanation of how the process actually functions.  As, science, it would explain the process in equations whose terms represent the interdependent flows and whose relations represent the critical interdependencies of these flows to one another.  As two points implicitly define a line, and vice versa, so the terms would implicitly define one another; i.e. the functional terms would define the functional relations, and the relations would define the terms.

On our website, Bernard Lonergan’s Functional Macroeconomic Dynamics,[1] we have made a simple first-step rearrangement of the NIPA into explanatory form entitled Gross Domestic Functional Flows[2] to indicate to the economists at the BEA the possibility of their constructing a refined version.  We believe that the BEA’s expertise and resources applied in a collaboration with the Federal Reserve Board’s expertise and resources make possible an informative, highly useful explanation of the dynamics of the dynamic economic process.

We have also listed the Uses and usefulness[3] of an explanatory presentation on our website.

We believe that the BEA can provide a beneficial service to the nation and beyond by explaining the process.  Please let us know if you would like to discuss Lonergan’s new paradigm, i.e. new standard model, and our ideas about the nature and the possibility of an additional arrangement of the NIPA.

Thank you for your consideration.

Sincerely,

 

John Costello

The Functional Macroeconomic Dynamics Collaborative

Cc: Various

 

[1]https://functionalmacroeconomics.com

[2]https://functionalmacroeconomics.com/table-of-contents/revision-of-the-nipas/

[3]https://functionalmacroeconomics.com/table-of-contents/revision-of-the-nipas/use-of-the-revision/

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