As represented below in the **Diagram of Rates of Flow**, in Functional Macroeconomic Dynamics the “**basic terms **are **defined **by their **functional relations**.” The basic terms are **precise analytical** terms upon which a superstructure of explanatory relations can be constructed. Thus, the terms are of **scientific and explanatory significance. (Continue reading)**

# A Note on Disagreeing with Einstein and the Determinists, on Avoiding a Vicious Circle, and on the Need for Precise Analytical Distinctions

Economic process – like other world processes – has an immanent intelligibility consisting of **primary ****relativities **which can be applied to the coincidental **secondary ****determinations which **occur throughout time in a **non-systematic manifold**. Economic process is constituted by schemes of recurrence under the dominance of **abstract **principles and laws; nevertheless, the actual **concrete **workings of the economic schemes of recurrence are shot through and throughout time with **indeterminancy**. So, it is a fact that **prediction is impossible in the general case**, since the **concrete** patterns of events occurring throughout time are a non-systematic aggregate. Thus, the point-to-line and higher **correspondences **are based upon the **indeterminacy of the relation** between current surplus products and the ultimate later basic products that eventually exit the** dynamic **process and enter into the standard of living.

An event in an economic scheme of recurrence has a **diverging series of conditions**. 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)

# The Two Components of Concrete Relations

One cannot help but think that Bernard Lonergan had **functional** **macroeconomic dynamics **clearly in mind as he treated the intelligibility of world process in CWL 3, *Insight: …, *which is very much an implementation of the act of understanding of mathematicians and natural scientists. In his understanding of mathematics, the natural sciences, and the science of macroeconomics in particular, he grasped that the explanation of the **dynamic concrete **process is expressed by a mathematical conjunction of component **abstract **primary relativities with component **concrete **secondary determinations from the non-systematic manifold. And these secondary determinations, such as particular prices and quantities, are to be **interpreted **in the light of the significant, abstract, explanatory variables rather than in the obscurity of the **IS-LM, **and **AD-AS **models. (Continue reading)

# The Significance of Burley’s And Csapo’s Characteristic Equation And Its Root Solution

Our references in this section are [Burley, 1992-2] and [Burley and Csapo, 1992-1].

**Burley**, Peter and **Csapo**, Laszlo, (1992) ** Money Information in Lonergan-von Neumann Systems**, Economic Systems Research, Vol 4, No. 2, 1992

**[Burley and Csapo, 1992-1]**

**Burley**, Peter (1992) ** Evolutionary von Neumann Models**, Journal of Evolutionary Economics 2 , 269-80

**[Burley, 1992-2]**

We consider a game-theoretic, von Neumann model of the transitional process from an initial stationary state to a more abundant stationary state, with matrix A of inputs and matrix B of outputs containing explanatory functional variables. (continue reading)

# The Role of Philanthropy to Achieve the Good of Economic Order: Notes Towards a Normative Model

**Philanthropy: **Anyone familiar with the medical and cultural institutions of Metropolitan Boston – upon which institutions the regional economy rides piggyback – cannot help but admire the beneficence, wisdom, and benefit of philanthropy: the Connors Center for Women’s Health and Gender Biology at Brigham and Women’s Hospital; the Connors Family Learning Center and the Clough Center for the Study of Constitutional Democracy at Boston College; the Yawkey Center for Outpatient Care and the Wang Building at Mass General; The Rosenberg Building at Beth Israel Hospital; the Salvation Army Kroc Center on Dudley St.; the Harry V. Keefe Library and the Clough Center for Global Understanding at Boston Latin School; the John A. Paulson School of Engineering and Applied Sciences at Harvard; the Carl J. and Ruth Shapiro Cardiovascular Center at Brigham and Women’s Hospital; museums, endowed scholarship funds, hundreds of endowed chairs, stained glass windows, etc. (Continue reading)

# DSGE vs. FMD; Sbordone, Tambalotti, Rao, and Walsh

**DSGE** is – to many economists – the **standard model ****and method **of macroeconomic analysis. See our treatment of the textbooks’ IS-LM, AD-AS models and the Phillips Curve correlation.

The acronym stands for **Dynamic** (in Newtonian mechanics an external force causes a change to constant velocity, i.e. an acceleration, which may be negative or positive), **Stochastic** (random, not according to system, probabilistic, unexplained) **General** (pertaining to the entire economic process), **Equilibrium** (essentially Walrasian static equilibrium).

Leon Walrasdeveloped the conception of the markets as exchange equilibria. Concentrate all markets into a single hall. Place entrepreneurs behind a central counter. Let all agents of supply offer their services, and the same individuals, as purchasers, state their demands. Then the function of the entrepreneur is to find the equilibrium between these demands and potential supply. …The conception is exact, but it is not complete. It follows from the idea of exchange, but it does not take into account thephasesof the productive rhythms. … [CWL 21, 51-52] (Continue reading)