Category Archives: Concomitance

Explanatory Macroeconomic Dynamics; Relevant In Any Instance

There are five figures below from CWL 15:  The single figure on the left represents the interrelations of interdependent Monetary Flows; and the figure contains the important condition of dynamic equilibrium: G = c”O” -i’O’ = 0.  The four figures stacked on the right demonstrate aspects of the productive phases constituting a Pure Cycle of Expansion. The bidirectional arrows uniting the two sides signify that the dynamic equilibrium among interdependent flows specified on the left is to be achieved consistently throughout the long-run expansion represented on the right.  This condition of dynamic equilibrium is that the crossover flows between the two interacting circuits must continuously balance even as they continuously vary in magnitude in the succession of phases constituting the expansionary process.  Just as the general laws of simple parabolic or pendular motion are explanatory and applicable to any particular instance of initial angle and velocity, so a) the primary relativities of productive and monetary flows, and b) the primary differentials of long-term expansion explain the economic process, and are normatively relevant in every particular instance.  All five diagrams are unitary.  Each and every velocitous and accelerative flow of products and money has proximate or remote explanatory aspects embedded in all five diagrams. (Continue reading)

Field Theory in Physics and Macroeconomics

We hope to inspire serious graduate students of economics a) to seek and achieve an understanding of “Macroeconomic Field Theory,” b) to verify empirically Lonergan’s field relations,  and c) to use the explanatory field relations as the basis of influential scholarly papers.

We trace developments

  • in physics from Newtonian mechanics to modern field theory, and
  • in economics from Walrasian supply-demand economics to purely relational, Modern Macroeconomic Field Theory.

Key ideas include a) abstraction and implicit definition as the basis and ground of invariance in both physics and macroeconomics, b) the concept of a purely relational field, c) immanent intelligibility and formal causality, and d) the canons of parsimony and of complete explanation. We highlight some key ideas: (continue reading)

FMD’s Take on Greg Mankiw’s Take on Modern Monetary Theory

Contents:

  • .I. Introductory
  • .II. The “legal” basis of our criticism; the “laws” of the process
  • .III. Key objections to Modern Monetary Theory
  • .IV. Observations re “A Skeptic’s Guide to Modern Monetary Theory”
  • .V. Why and how the Basic Expansion fails to be implemented
  • .VI.  Addendum #1: Primary relativities of the economic process
  • .VII. Addendum #2: Excerpts re the drift to totalitarianism

Continue reading.

A Superior and Far Less Expensive Macroeconomics Textbook

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 canons of empirical method
  • a scientific, dynamic  heuristic
  • the technique of implicit definition; explanatory terms defined by the functional relations in which they stand with one another
  • velocitous functional unities of scientific and explanatory significance replacing the BEA’s descriptive, commonsense, accountants’ unities
  • the structure of the lagged, rectilinear productive process
  • money as a dummy invented by man
  • the perspective of a hierarchical series of monetary circuits
  • how a monetary circulation meets the rectilinear production-and-vending process
  • the primary relativities and concomitance in the Diagram of Rates of Flow
  • dynamic equilibrium replacing static Walrasian general equilibrium
  • the velocity of money in terms of magnitudes and frequencies
  • prices are not a given and not requiring explanation; rather prices are in need of explanation
  • interpretation of prices, quantities, interest rates in the light of significant explanatory variables
  • the pure cycle and its constituent phases in the expansion of the objective economic process
  • the abstract primary relativities and concrete secondary determinations in the expansion of the economic process
  • the statistical residue and why prediction is impossible in the general case; predicting weather vs. predicting planetary motion
  • the significance of investment’s monetary correlate
  • the ineptitude of manipulating interest rates
  • the explanation of government and foreign-trade imbalances by the dynamics of superposed circuits
  • the distinction between efficient cause and formal cause
  • distinguishing between self-healing and the effect of interventions
  • the intelligibility and explanatory power of the basic price-spread ratio
  • Figures 14-1, 24-7, and 27-1 in CWL 15

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.

 

The IS-LM, AD-AS, and Phillips Curve Models

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, etc. (See full title specification below.)

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:
  • A Purely Dynamic Process Requiring a Dynamic Heuristic:
  • A Purely Functional Analysis:
  • A Purely Relational, Explanatory Analysis:
  • A Theory, General and Universally Applicable to Concrete Determinations in Any Instance:
  • A Normative Theory Having a Condition of Equilibrium:

Always the Current Process: Continue reading

New Foundations in 30 Minutes

New foundations for a new science of macroeconomics are grounded in

  • a scientific, dynamic heuristic
  • the technique of implicit definition
  • precise, purely relational, analytical distinctions between fundamental terms representing functional flows of products and money
  • the functional interrelations among these interdependent, mutually defining, explanatory functional flows

Continue reading