A very expensive macroeconomics textbook, having 700-1000 pages, would contain a lot of interesting history, a lot of fuzzy psychology, unscientific analysis, and uncertain conclusions. A reader would not gain a clear theory and complete explanation of the dynamics of the real economic process. However, is there not a superior 228-page, far less expensive textbook right in our hands? How about this? Reword the subtitle of CWL 15 from An Essay in Circulation Analysis to A Textbook of Circulation Analysis, and let the professor instruct the serious student to read the book three times, then report back to discuss the following:
The student would learn much that is radically different, explanatory, and very useful; and he/she would gain a perspective or framework by which to evaluate and criticize the flawed premises and tenets of conventional textbooks and traditional theories.
In this section, we are contrasting familiar textbook models of macrostatic equilibrium, with Lonergan’s explanatory theory of macrodynamic equilibrium. We are contrasting a macrostatic toolkit with a purely relational field theory of macroeconomic dynamics. Lonergan discovered a theory which is more fundamental than the traditional wisdom based upon human psychology and purported endogenous reactions to external forces. His Functional Macroeconomic Dynamics is a set of relationships between n objects, a set of intelligible relations linking what is implicitly defined by the relations themselves, a set of relational forms wherein the form of any element is known through its relations to all other elements. His field theory is a single explanatory unity; it is purely relational, completely general, and universally applicable to every configuration in any instance. (Continue reading)
The process is always the current, purely dynamic process. The analysis is purely functional, purely relational and explanatory analysis. The theory is general and universally applicable to concrete determinations in any Instance; The theory is a normative theory having a condition of equilibrium.
Our subheadings in this treatment are as follows:
Always the Current Process: Continue reading
New foundations for a new science of macroeconomics are grounded in
Larry Summers is the esteemed former Vice President of Development Economics and Chief Economist of the World Bank, (1991–93), senior U.S. Treasury Department official, ultimately Treasury Secretary (1999–2001), former director of the National Economic Council for President Obama (2009–2010) and former president of Harvard University (2001–2006).
Larry’s Blog of 9/13/2018 asked questions and gave suggestions regarding establishing new foundations for macroeconomics.
As we did in our blog of 9/11/2018 regarding Ray Dalio, let us say in the beginning what we say near the end:
Finally, Larry states that “the arguments that Gennaioli and Shliefer make need to be debated in the profession.” Let us suggest that, before Larry calls for debates among macroeconomists about the obvious inadequacy of present foundations, the entire macroeconomics profession must study carefully Bernard Lonergan’s Macroeconomic Dynamics. That book has already brought insights from mathematics, physics, and scientific method to the discovery of a radically new foundation. Also, let us advise them how not to react in their reading. Initially they will find Lonergan’s Functional Macroeconomic Dynamics radically different from the static Walrasian structures they have long espoused and depended upon; they might be inclined gradually to rationalize against its method and tenets; then, instead of embracing it, they might seek arguments to defend themselves against it; finally, having mistakenly persuaded themselves that it is a waste of their precious time, they might put it aside. However, if they courageously and carefully power through Lonergan’s dynamics 3-5 times, they will find themselves saying, “Whoa! Bernard Lonergan operated from a more profound point of view and discovered a deeper unity in macroeconomics. With his understanding of what constitutes science and explanation and with his employment of the technique of implicit definition, this polymath has successfully applied his expertise in math, physics, and scientific method to discover a new field theory of macroeconomics, a new paradigm, a whole new theoretical combination of foundation and superstructure which explains both the normative equilibria and maladaptive disequilibria of the intrinsically cyclical, dynamic economic process. This is something of a Copernican Revolution.” Then, rather than calling for debates, let Larry call for elucidation, elaboration and implementation of Functional Macroeconomic Dynamics at the Bureau of Economic Analysis, the Federal Reserve Board, textbook publishers, colleges, and universities. Continue reading
The popular textbooks of Macroeconomics – by N Gregory Mankiw, Paul Krugman and Robin Wells, Olivier Blanchard, Andrew B. Abel and Ben S. Bernanke, William J. Baumol and Alan S. Blinder – suffer in common from several flaws. Our subheadings immediately below and the pointers thereafter point out flaws and deficiencies in textbooks commonly used in higher education. Though the treatments in this section are not exhaustive, they are sufficiently provocative; they should stimulate careful scrutiny of, and skepticism regarding, many traditional and conventional tenets. Finally, though the treatments in this section are relatively brief and often primarily referential, there is a lot of ground to cover; so, we will underline and publish as time allows.
