New foundations for a new science of macroeconomics are grounded in
This post was originally entered on May 30, 2022. We repeat it now because it is 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
Being is the objective of the unrestricted desire to know. Being is intrinsically intelligible and one. Apart from being there is nothing.
Intelligibility is the very essence of unity. Intelligibility is intrinsic to being and, at the same time, it is the essence of unity. Formal intelligibility is form; it is the unity of unification or of correlation. Correlation is abstract; it constitutes the implicit definition of explanatory terms by their functional relations among themselves.
“Functional” is for Lonergan a technical term pertaining to the realm of explanation, analysis, theory; … Lonergan (identified) the contemporary notion of a “function” as one of the most basic kinds of explanatory, implicit definition – one that specifies “things in their relations to one another” … [CWL 15, 26-27 ftnt 27]
The economic process is an aspect of being. The immanent intelligibility of the dynamic economic process is the essence of the process’s unity. (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
The reader will note that most of what’s quoted below comes from a single section, “Lonergan’s Entry into Economics, 1930-1944”, of CWL 15’s “Editors’ Introduction,” authored by Frederick G. Lawrence. Previously, in several of our own sections we have recommended that Editors’ Introduction as beneficial for putting Lonergan’s Essay in its historical, political, and purely theoretical contexts. It is a must-read. We have printed the Introduction’s Table of Contents in several places: Click here, here, here, and here. The Table is again printed at the end of this entry.
We quote: Continue reading
The method of circulation analysis … involves a minimum of description and classification, a maximum of interconnections and functional relations. … Analytic thinking uses classes based on similarity only as a springboard to reach terms defined by the correlations in which they stand. [CWL 21, 111]
… the introduction of the notion of the monetary function… takes a further step towards defining a circulation of money……..not a rotational movement……. rather a circular series of relationships of dependence of some flows of payments on other flows. Money moves only at the instant of payment or transfer. Most of the time it is quiescent. … it may also be dynamically quiescent, and then it is held in reserve for some definite purpose. … Money held in reserve for a defined purpose will be said to be in a monetary function. Five such functions are distinguished: basic demand, basic supply, surplus demand, surplus supply, and a fifth redistributive function. (CWL 15, 48)…….
Volume 15 of Collected Works of Bernard Lonergan is entitled Macroeconomic Dynamics: An Essay in Circulation Analysis. Lonergan analyzes and explains the economic process as a circulatory process; that is, as a dynamic organic process of interdependent circulatory flows of goods and services and their functionally-congruent payments. It is to be understood and verified as a coherent set of flows implicitly-defined by their functional relations to one another. Continue reading
Functional Macroeconomic Dynamics seeks not merely to “view” and describe the economic process; rather it seeks to understand and explain the process in order to provide norms of adaptation and systematic guidance to managers of the process. (Continue reading)
U.K. officials need to spend $38.60 plus shipping for Bernard Lonergan’s “Macroeconomic Dynamics: An Essay In Circulation Analysis.” To satisfy their obligation to the U.K. public, they must read, understand, and thus gain enlightenment from Macroeconomic Field Theory as to how the dynamic system of production, finance, and exchange actually works. What are its norms and what practical precepts does the explanation of the dynamic organic process yield to free people?
Also. they need to call a colloquium in which several economists lecture and present scholarly technical papers on Macroeconomic Field Theory to help all government officials understand their nation’s present problems, past mistakes, and future solutions.
U.S. officials at the Fed. the Treasury, and Congress should seek the same enlightenment; and bankers, money managers, and financial talk-show hosts should do the same. (Click here and here)
The macroeconomics textbooks feature three key macrostatic models, all three of which are sublated by the purely relational field theory called Functional Macroeconomic Dynamics. The textbooks’ three featured graphs are two momentary intersections of supply and demand curves plus the Phillips Curve correlation of unemployment and interest rates:
The key elements grounding the discovery and formulation of the immanent, field-theoretic intelligibility of the organic, unified, whole economic system include: (Continue reading)
Lonergan demonstrates that Marx’s economics is insufficiently abstract and is contaminated by descriptive sociological and political categories; he finds Marx’s summons to class conflict perilous to humanity because it promotes and enforces a drift away from liberty to a totalitarianism culminating in the dreadful conditions of a no-escape “frontier, clear and firm indoctrination, controlled media of information, a vigilant secret police, and the terrifying threat of labor camps,” – all in the name of a mythical macroeconomics. (Continue reading)