Restricted to persons with solid backgrounds in mathematics and the natural sciences
A sound theory is a good thing to keep around. Clerk-Maxwell’s electromagnetic theory and Kirchoff’s laws of electric circuits are good systematics to consult when one is designing a system to deliver electricity. Similarly, when one is seeking to understand, affirm, and manage the economic process, a reliable, scientific macroeconomics, which both explains how the process actually works and yields norms for adaptation by human participants, is a good thing to have around.
Common sense is different from science. Common sense describes; science explains. Common sense relates things to us; science relates things to one another. And scientific Macroeconomic Field Theory, also called Functional Macroeconomic Dynamics, is different from the mere commonsense compilation of descriptive accounting aggregates called Gross Domestic Product. Continue reading
We ask all serious graduate students and professors of macroeconomics, government economists, conscientious politicians, poorly educated journalists, and financial-talk-show “pundits” to please read Bernard Lonergan’s Macroeconomic Dynamics, (CWL 15), Section 26, “The Cycle of Basic Income”. That section addresses several important economic issues:
Then, after the first reading, please read that section a second time.
Thank you.
[CWL 15] Lonergan, Bernard (1999), Macroeconomic Dynamics: An Essay in Circulation Analysis, ed. Frederick G. Lawrence, Patrick H. Byrne, and Charles Hefling, Jr., vol 15 of Collected Works of Bernard Lonergan, (Toronto: University of Toronto Press)
In our Thanks section we have emphasized our debt to Professor Peter Burley. With a PhD in physics (Adelaide, 1965) and a PhD in Economics (Princeton, 1968) he was well qualified to understand the revolutionary nature of Lonergan’s Macroeconomic Field Theory. (Continue reading)
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)
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)
In the graphs of CWL 15, pages 121-25, it is easy to become disoriented by the symbols on the vertical axes and by the titles and annotations. In particular, one might tend mistakenly to view Q as a symbol for an absolute quantity or an accumulation rather than for a rate of flow of a quantity. Recall:
In Lonergan’s circulation analysis, the basic terms are rates – rates of productive activities and rates of payments. The objective of the analysis is to discover the underlying intelligible and dynamic (accelerative) network of functional, mutually conditioning, and interdependent relationships of these rates to one another. [CWL 15 26-27 ftnt 27]
Lonergan never used terms for magnitudes, only for rates and their accelerations (‘rates of rates’) in the Essay in Circulation Analysis. [CWL 15, 182]
But if the ultimate product qi is related by a double summation to the contributions of factors of production qijk, then the total flow of ultimate products Qi is also related by a double summation to the rates of the contributions of the factors of production Qijk, where both Qiand Qijk are instances of the form ‘so much or so many every so often.’ (CWL 15, 30)
In the graphs superscripts identify basic (‘) or surplus (“) elements. Absence of superscripts here indicates “in any case.”