There is sufficient content in this Section 26 to serve as the basis of an impressive graduate thesis featuring explanatory first- and second-order differentiations of interdependent functional activities implicitly defined by their functional relations to one anther. The set of equations would constitute a significant part of a complete explanatory theory.
Part I: Introductory
Part II – Divergent Flows of Products and Money; Consequent Inflation or Deflation
Case A: The problem of an inadequate rate of saving in a surplus expansion; I”/(I’+I”)
A note re stagflation stifling a full surplus expansion
Case B: The problem of an excessive rate of saving in a basic expansion
Part III – Outline of Traditional Theory’s Lack of Understanding re Artificially Manipulating Interest Rates
Part IV – Selected Excerpts and Comments Relevant to CWL 15, Section 26, “The Cycle of Basic Income,” pages 133-44
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).
Our concern, as always, is to understand and verify how money should circulate to meet the rectilinear primary process of production and sale. We seek a normative theory which scientifically explains, rather than merely describes, the current, purely dynamic economic process. The scientific explanation will be in the form of the objective relations of explanatory velocities and accelerations to one another. These explanatory conjugates will be abstract correlations defined by their functional relations among themselves – rather than descriptions – no matter how literary and vivid – of conditions, states, and events as they are related to us and affect us for better or worse. Our goal is to achieve a scientific explanation yielding norms to which we must adapt. (Continue reading)
The Saturday-Sunday Wall Street Journal of 4/8-9/ 2023 featured an Interview by James Freeman of Paul Singer, founder of Elliott Management. P. Singer’s past predictions are notably congruent with the consequences systematically necessitated by the deviations in policy of the executive and legislative branches from the norms of Lonergan’s Scientific Functional Macroeconomic Dynamics.
First, we quote some sections of Freeman’s interview of Singer; then we’ll quote brief sections to preview the treatment to follow. From the Interview: (Continue reading)
Albert Einstein, Steven Weinberg, Lillian Lieber, Douglas Giancoli, Raymond A. Serway, Bernard Lonergan, Philip McShane, Peter Burley,
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)
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)
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
This post was originally entered on May 30, 2022. We repeat it now because it remains relevant.
“The road up and the road down is one and the same. (Heraclitus)
ὁδὸς ἄνω κάτω μία καὶ ὡυτή
Archaeologists and scholars have not found the context of this isolated fragment of Heraclitus. What “road” was he referring to, and was he was speaking literally or figuratively? I simply like the statement as an introduction to the ups and downs of distinct price-quantity flows, whether in a pure cycle of expansion or in a distorted cycle of inflationary boom and corrective slump. Continue reading
On Bloomberg Surveillance this morning (11/16/2022), Dr. Lindsey Piegza (Stifel Institutional, Chicago) spoke with superior understanding of the implications of the present state of the tiers of income flows in the economic process. Interviewer Lisa Abramowicz (Bloomberg) asked good questions.
L. Piegza said that there is evidence that people in the lower income brackets, who usually spend all their income on point-to-point (basic) items, are exhausting their previous cash cushion of extra money for basic goods and services; so now they appear to be cutting back on purchases of both brand-name and luxury items? The real economy is showing signs of contraction, with implications for recession and unemployment. Continue reading