We are commenting with respect to Andrew Lilley and Kenneth Rogoff’s “conference draft” discussing the advisability of a FRB policy of negative interest rates:
Lilley, Andrew and Kenneth Rogoff, April 24, 2019: “The Case for Implementing Effective Negative Interest Rate Policy” (Conference draft for presentation at Strategies For Monetary Policy: A Policy Conference, the Hoover Institution, Stanford University, May 4, 2019, 9:15 am PST) [Lilley and Rogoff, 2019] (Continue reading)
This is a slightly-revised repeat of a Post of 9/11/18. It remains relevant to Mr. Dalio’s thinking.
The final paragraph of this Post is as follows: We hope that Mr. Dalio will study Bernard Lonergan’s Macroeconomic Dynamics: An Essay in Circulation Analysis (CWL 15) to advance his present considerable understanding even further so as to understand the real grounds that might make his predictionssuccessful . We hope that, as a person of influence, Mr. Dalio will convey a more advanced, explanatory understanding of the economic process to the nation and the world.
On 9/11/18 Ray Dalio, Co-Chairman and Founder of Bridgewater Associates, appeared on TV and reviewed some highlights of his new book, A Template for Understanding Big Debt Crises. The book is presently available as a free PDF (with some strings attached). An alternative, no-strings-attached, introduction to Mr. Dalio’s thinking is available on the Bridgewater website’s home page under the title The Economy, How the Economic Machine Works.
Mr. Dalio’s comments were cogent; they were somewhat aligned with much of what Lonergan has provided in his scientific systematics of the economic process. Both would agree that the repetition of crises is not inevitable; crises are caused by repeated mismanagement. But what Dalio loosely describes Lonergan precisely explains. Continue reading →
[9/22/2020] (Bernard Lonergan, Albert Einstein) Because insights arise with reference to the concrete, mathematicians need pen and paper, teachers need blackboards, pupils have to perform experiments for themselves, doctors have to see patients, trouble-shooters have to travel to the spot, people with a mechanical bent take things apart to see how they work. But because the significance and relevance of insight goes beyond any concrete problem or application, men formulate abstract sciences with their numbers and symbols, their technical terms and formulae, their definitions, postulates, and deductions. Thus, by its very nature, insight is the mediator, the hinge, the pivot. It is insight into the concrete world of sense and imagination. Yet what is known by insight, what insight adds to sensible and imagined presentations, finds its adequate expression only in the abstract and recondite formulations of the sciences. [CWL 3, 6/30] [#89] (Click here for previous “Single Paragraphs” or “Brief Items”)
Special Relativity and Functional Macroeconomic Dynamics are field theories. (Click here and here and here) We wish to gain further appreciation of FMD as a field theory by juxtaposing it with Special Relativity.
… Special Relativity is primarily a field theory, that is, it is concerned not with efficient, instrumental, material, or final causes of events, but with the intelligibility immanent in data; but Newtonian dynamics seems primarily a theory of efficient causes, of forces, their action, and the reaction evoked by action. … Special Relativity is stated as a methodological doctrine that regards the mathematical expression of physical principles and laws, but Newtonian dynamics is stated as a doctrine about the objects subject to laws. [3, 43/67] (Continue reading)
Philip McShane had a strong background in mathematics and theoretical physics; thus he was able to understand the scientific significance of Bernard Lonergan’s macroeconomicfield theory in an Einsteinian context.
First we display, in brief, key excerpts, many of which contain analogies from physics and chemistry, relevant to the science of Functional Macroeconomic Dynamics; then we show the same excerpts more fully within lengthier quotes. Continue reading →
To help the reader gain an appreciation of Lonergan’s achievement of Modern Macroeconomic Field Theory we will, in each section, print leading excerpts, then highlight the key concepts of those excerpts. We will comment on the historically-significant advances in geometry of Euclid and Hilbert, in physics of Newton andEinstein, and in macroeconomics of Lonergan.
Euclid’s great achievement was his rigorous deduction of geometry.
Hilbert’s great achievement was his employment of implicit definition to reorder Euclid’s geometry.
Newton’s two great achievements were unifying the isolated insights of Galileo and Kepler into a unified system of mechanics and his invention of the calculus.
One of the great achievements of Einstein was the invention of the field theories of Special Relativity, General Relativity, and Gravitation.
One of Lonergan’s several great achievements was his systematization of macroeconomic phenomena in his Modern Macroeconomic Field Theory. He combined the technique of implicit definition introduced by Hilbert and the concept of a field theory developed by Faraday and Einstein; and he developed an explanatory macroeconomics, which is general, invariant, and relevant in any instance. (Continue reading)
“if we want a comprehensive grasp of everything in a unified whole, we shall have to construct a diagram in which are symbolically represented all the various elements of the question along with all the connections between them.” [McShane, 2016, 44]
from [McShane, 2017, Preface xii] “I have brought you face to face with the first page of the most significant book of the twentieth century.* There the man suggests: 1) that a key move is to pause over little things, 2) that Archimedes invented the permanent science of hydrostatics by focusing on a crown-weighing problem. You are on the edge of the invention of the permanent science of econo-dynamics. What is your next move? Obviously, if you are an economist, you get moving towards a Nobel Prize.”
*The book is Bernard Lonergan’s Insight, A Study of Human Understanding, 1957, 1992 CWL 3, University of Toronto Press.
Taking a cue from Descartes, Lonergan advised that we attend to the simple things that anyone can understand.
Again and again, in his regulae ad directionem ingenii, (Descartes) reverts to this theme. Intellectual mastery of mathematics, of departments of science, of philosophy, is the fruit of a slow and steady accumulation of little insights. Great problems are solved by being broken down into little problems. The strokes of genius are but the outcome of a continuous habit of inquiry that grasps clearly and distinctly all that is involved in the simple things that anyone can understand. (CWL 3, 3/27) Continue reading →