Category Archives: Bureau of Economic Analysis

Alan S. Blinder’s Article, “Team Transitory Had a Point About Inflation”

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Alan S. Blinder (Princeton) had an article in The Wall Street Journal of Thursday, 7/20/2023 entitled Team Transitory Had a Point About Inflation

Prof. Blinder was concerned to relate the recent and current inflation to a) supply shocks, and b) the speed and extent of the manipulation of interest rates. Our concern is rather to explain the recent and current inflation as formally caused, and thus explained rather than merely postulated, by a) the recent flooding of the economic system – given its capacity, state of productivity, and phase of expansion – with trillions of dollars of free money, and b) the circulation of those inflation-causing trillions of free dollars throughout a) tiers of income and propensities to consume, and b)  two productive operative circuits and the unproductive Redistributive Function, in which sit the stock and bond trading operations. Continue reading →

Insight Into The “Baseball Diamond”: Discovery For Implementation

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Thus, if we want to have 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 along with all the connections between them. [McShane 2014, 11 (quoting CWL 7, 151)]

We wish here to suggest the insights the reader should have to fully appreciate all that is contained in the Diagram of Rates of Flow. (Continue reading).

The Einsteinian Context: Curvature and Relativity

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Albert Einstein, Steven Weinberg, Lillian Lieber, Douglas Giancoli, Raymond A. Serway, Bernard Lonergan, Philip McShane, Peter Burley,

.1. Introductory

Graduate students seeking a thesis topic may expand this treatment of the Einsteinian context of Functional Macroeconomic Dynamics.  It should be of special interest to those having a strong background in theoretical physics and, thus, able to appreciate the analogies from physics.  “Similars are similarly understood.” (CWL 3, 288/313)

Philip McShane alerted us to the resemblances between Lonergan’s context of general macroeconomic dynamics and Einstein’s context of general relativity.

(Part Two entitled Fragments) belongs almost entirely in what I call the Einsteinian context of Part Three, in contrast to the Newtonian achievement of Part One; … [CWL 21, Index, 325]

A new science has emerged.  Lonergan has elevated conventional macrostatics to a macrodynamics explaining economic accelerations. (Continue reading)

The Notion of Organic Unity; Macroeconomic Field theory as a Unified, Systematic Whole

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.1. Introduction

Lonergan’s treatment of the intelligibility of the plane circle provides to us a clue.  In the basic insight defining the plane circle, – that all radii are equal – all the interrelated concepts tumble out together in an intelligible unity.  The all-together intelligibility points to a template for explanation in the macroeconomic field; it fore-casts a singular unified intelligibility of the dynamic, organic economic process.  In the sweeping comprehensive act of understanding, all the abstract explanatory conjugates explaining the dynamic economic process are “yoked” together by their functional relations to one another.  The interdependencies of the flows which constitutethe whole dynamic system are grasped in a solidary whole.  And the patterns of the formulation are isomorphic with the patterns in the objective, unitary economic process.  The principle of unity and wholeness is a single, comprehensive intelligibility. (Continue reading)

To and For Economists, Investment Analysts, and Commentators on Bloomberg Surveillance, Squawk Box, and Mornings with Maria

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To Tom Keene, Andrew Ross Sorkin, Maria Bartiromo, Lisa Abramowicz, Becky Quick, Francine Lacqua, Dagen McDowell, Joe Kernen, Jonathan Ferro, Larry Kudlow, Charles Payne, Neil Cavuto, Stuart Varney, Jim Cramer, Henrietta Treyz, Larry Summers, David Weston, Courtney Donohoe, Romaine Bostick, Hallinda Amin, Dani Burger, Gina Cervetti, Margaret Collins, Manus Cranny, Abigail Doolittle, Scarlet Fu, June Grasso, Kriti Gupta, Ritika Gupta, Morgan Brennan, David Faber, Steve Liesmann, Carl Quintanilla, Kate Rooney, Rick Santelli, Michael Santoli, Liz Claman, Gerry Baker, Taylor Riggs, Anastasia Amoroso, Jackie DeAngelis, Brian Brenberg.

Lonergan’s Preface to his seminal work Insight, A Study of Human Understanding, begins …

In the ideal detective story the reader is given all the clues yet fails to spot the criminal.  He may advert to each clue as it arises.  He needs no further clues to solve the mystery.  Yet he can remain in the dark for the simple reason that reaching the solution is not the mere apprehension of any clue, not the mere memory of all, but a quite distinct activity of organizing intelligence that places the full set of clues in a unique explanatory perspective. (CWL 3, Preface ix)

Paraphrasing the above (CWL 3, Preface, ix): Continue reading →

Pointers Regarding Interest Rates and Inflation; The Delusion in Manipulation of Interest Rates

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We encourage the reader to consult the following entries.

The Ineptitudes in Central Bank Operations

John H. Cochrane’s Article in the Wall Street Journal, Thursday 8/25/2022

Facing Facts: The Ideal of Constant Value of the Currency vs. the Fact of Inflation

The Road Up is The Road Down; the Mechanism of rising and Falling Prices

Stagflation Demystified

Paul Romer’s “Endogenous Technological Change” in Bernard Lonergan’s Framework

Here are a few brief selections from the above treatments:

Traditional theory looked to shifting interest rates to provide suitable adjustment.  In the main we shall be concerned with factors that are prior to changing interest rates and more effective. [CWL 15, 133) Continue reading →

New Foundations in 30 Minutes

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New foundations for a new science of macroeconomics are grounded in

  • a scientific, dynamic heuristic
  • the technique of implicit definition
  • precise, purely relational, analytic distinctions between abstract fundamental terms and relations from which a superstructure of complete explanation may be deduced
  • the relativistic, field-theoretic functional interrelations among interdependent, mutually-defining, explanatory functional flows

Continue reading →

Lonergan’s “Macroeconomic Field Theory” (MFT), AKA “Functional Macroeconomic Dynamics” (FMD)

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Functional Macroeconomic Dynamics seeks not merely to “view” and describe the economic process; rather it seeks to understand and explain the process in order to provide norms of adaptation and systematic guidance to managers of the process. (Continue reading)

 

Concomitance and Credit;  A New Paradigm for the Federal Reserve Bank; Functional Macroeconomic Dynamics Drives Establishment Economics into the Shadows

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The macroeconomics textbooks feature three key macrostatic models, all three of which are sublated by the purely relational field theory called Functional Macroeconomic Dynamics.  The textbooks’ three featured graphs are two momentary intersections of supply and demand curves plus the Phillips Curve correlation of unemployment and interest rates:

  1. the intersection of the supply and demand curves at a certain price of goods and services (the macrostatic AD-AS model),  
  2. the intersection of the supply and demand curves at a certain interest-rate, rental-price of money (the macrostatic IS-LM model),  plus,
  3. the now-debunked Phillips Curve correlation of unemployment and interest rates.

The key elements grounding the discovery and formulation of the immanent, field-theoretic intelligibility of the organic, unified, whole economic system include: (Continue reading)