Category Archives: Federal Reserve

Jamie Dimon’s Challenges to Himself and to the Nation

4/7/2021:  Yahoo Finance today featured an article by Julia La Roche entitled ‘The fault line is inequality’: J.P. Morgan’s Dimon calls for fixing America’s ‘self-inflicted’ problems.  La Roche was reviewing the Public Policy section of Dimon’s 67-page Chairman and CEO Letter to Shareholders.  Mr. Dimon seeks to end the nation’s self-infliction of problems threatening the culture, the economy and the polity.  He particularly regrets “false arguments of fanatics, the certitude of ideologues and cycles of intolerance.” Continue reading

A Tale Of Two Faulty Circulations

PART A – Examples and Comments

Our contention is that a large discretionary injection of “free money” into the channels of Demand – whether by the Fed or the Treasury – rather than as “money justified” through the channels into productive supply, (S’-s’O’) and (S”-s”O”), is intrinsically inflationary.  New money channeled into either the market for secondary financial assets or into the market for basic products, without the money being  “justified” by productive output, is dangerously inflationary. (Continue reading)

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 Macroeconomic Field Theory

https://functionalmacroeconomics.com

functionalmacroeconomics@gmail.com

 

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