This set of excerpts has been assembled so as to inform and inspire. In its own way it informs the reader of the minds of Lonergan and key commentators. And it will, we hope, inspire the serious macroeconomist to reach up to those minds.
The section has not been arranged in a rigorous manner. On the contrary, it is a sort of random walk. But we hope the benefit of one’s reading it attentively will be great.
Schumpeter acknowledged that dynamic analysis called for a new light on equilibrium. Such new light arises when, over and above, the equilibria of supply and demand with respect to goods and services, there are recognized further equilibria that have to be maintained…..Moreover, such macroequilibria are more fundamental than the microequilibria assembled by Walras. The former are the conditions of a properly functioning economy [CWL 15, 92] (continue reading)
We frequently make the claim that Functional Macroeconomic Dynamics sublates all other macroeconomic theories by reaching an adequate level of abstraction, or a deeper unity, or a more profound point of view, or a purely relational, fully explanatory, scientific macroeconomics. This deeper intelligibility fully explains the economic process and eliminates at a stroke much of what is contained in the current popular 700-page textbooks.
Ragnar Frisch was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969.
Frisch’s failure to develop a significant theory typifies the failure of economists who search for a dynamic heuristic. As well as a fundamental disorientation of approach there is also a tendency to shift to an inadequate level of abstractionwith a premature introduction of boundary conditions in a determinate set of differential and difference equations. [McShane, 1980, 114] continue reading
On ensuing pages we list precepts mandated by a non-political, scientific Functional Macroeconomic Dynamics. The precepts are practical precepts for free people. Prior to that list we cite several passages used as the basis for the precepts.
It is the viewpoint of the present inquiry that, besides the pricing system, there exists another economic mechanism, that relative to this system man is not an internal factor but an external agent, and that the present economic problems are peculiarly baffling because man as external agent has not the systematic guidance he needs to operate successfully the machine he controls. [CWL 21, 109] (continue reading)
One of Lonergan’s great contributions to humanity was his division of scholarship into eight functional specialties: research, interpretation, history, dialectic, foundations, doctrines, systematics, and communications. Persons familiar with Lonergan’s works might read the title of this website and immediately, but mistakenly, think that this website is an application of the eight functional specialties to macroeconomics. It is not. Herein, in order to explain the economic process, we are seeking to understand and systematize interconnected functional economic activities which are implicitly defined by the functional relations in which they stand with one another. Continue reading
Prior to Copernicus (and perhaps others) the prevalent thinking about the sun and planets was a geocentric theory. The earth was the center of the universe, and the sun and known planets revolved around the earth. Astronomers deduced what they could from their assumption of a geocentric universe. Copernicus proposed a revolutionary heliocentric theory: The earth and other planets revolve around the sun. (Wikipedia has a good animation) Continue reading
The Harvard Crimson currently reports that Economics 10B is the most popular undergraduate course, having 585 students enrolled, for the fifth consecutive spring semester.
It is good that so many students are interested in macroeconomics,. It is not so good that the students will be oriented towards a static Walrasian framework, rather than to a Functional Macroeconomic Dynamics framework. Continue reading
Bernard Lonergan’s ideas should be discussed on talk shows. We invite hosts of the financial talk shows – Tom Keene, Francine Lacqua, Alix Steele, David Westin, Andrew Ross Sorkin, Becky Quick, Dagen McDowell, Maria Bartiromo, Lou Dobbs, Stuart Varney, and others – to study Bernard Lonergan’s Functional Macroeconomic Dynamics. They would learn a new system of macroeconomic laws; this would help them discuss issues and question guests from a scientific point of view.