Category Archives: Federal Reserve

Lilley and Rogoff Recommending Negative Interest Rates

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)

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)

Harvard Magazine’s Podcast, “Ask a Harvard Professor”

Harvard Magazine’s podcast, “Ask a Harvard Professor,” recently featured an interview of professors Doug Elmendorf and Karen Dynan – two good people – under the title Doug Elmendorf and Karen Dynan: How Much Can the Federal Budget and the Deficit Continue to Grow? (Click here for video and print versions of the interview)

(Continue reading)

Fundamental Disorientations at the Federal Reserve Bank and the National Bureau of Economic Research

We have arranged this Topic into four parts:

  • Part I: The Disorientations of Macroeconomists
  • Part II: Principles and Precepts of Analysis
  • Part III: A New Textbook, Lonergan’s Macroeconomic Dynamics: A Textbook in Circulation Analysis
  • Part IV Comments on The Federal Reserve’s Current Framework For Monetary Policy: A Review and Assessment, by Janice C. Eberly, James H. Stock, and Jonathan H Wright.

Part I: The Disorientations of Macroeconomists

One cannot help but admire and be grateful to the Federal Reserve Bank for its Flow of Funds matrices and the National Bureau of Economic Research for its GDP tables.  Great information, well done!  However, the Fed, the NBER, and the proponents of the DSGE methodology suffer from fundamental disorientations. The NBER’s descriptive, commonsense, national-income accounting must integrate the Fed’s data on credit and to be recast to provide an explanatory systematization of interdependent flows of products and money.  Devotees must reorient themselves.  (Continue reading)

Letter to The Bureau of Economic Analysis

The Functional Macroeconomic Dynamics Collaborative

Website: Bernard Lonergan’s Functional Macroeconomic Dynamics


Brian C. Moyer, Director

Bureau of Economic Analysis (BEA)

4600 Silver Hill Road

Washington, DC 20233

Dear Mr. Moyer,

Presently the Bureau of Economic Analysis (BEA) publishes three general versions of the National Income and Product Accounts (NIPA).

  1. Gross Domestic Product, Current $
  2. Gross Domestic Income by Type of Income; National Income by Type of Income; and, National Income by Sector …; Current $)
  3. Gross Value Added by Sector; Current $)

Would it be possible for the BEA staff to develop a fourth which would be explanatory of the production-and-exchange process? Continue reading

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)



Recommended Supplementary Reading for “Romer in Lonergan’s Framework”

Recommended reading for context of Romer’s and Lonergan’s achievements in economics:

Shute, Michael (2009) Lonergan’s Discovery of the Science of Economics, (Toronto, University of Toronto Press Incorporated 2010 [Shute, 2009] Continue reading

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

Paul Michael Romer is a University Professor at New York University and the co-recipient of the 2018 Nobel Memorial Prize in Economics Sciences.

Both Paul Romer and Bernard Lonergan provided scientific explanations of how the economic process can and should expand. (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