Re: A Future Economics

[Harry Veeder <eo200@xxxxxxxxxxxxxxxxxxx>]

> From: Gunnar Tómasson <gunnar.tomasson@xxxxxxxxxxx>
> Date: Thu, 30 Oct 2003 11:40:27 -0500
> To: post keynesian thought <pkt@xxxxxxxxxxxxxxxx>
> Subject: Re: A Future Economics
>
> Re. the following:
>
>> If Say's law refers to a closed (ideal) system, then isn't about time to
>> draft the laws of an open (real) system?
>
> Comment:
>
> Economists have tried to do just that since the 1930s - so far without
> success.

As a starting point I have suggested that we begin with the assumptions that
income =/= output and that saving =/= investment.

If the current relations are given by:

  1.1)    Output = Consumption + Investment

  1.2)    Consumption = Output - Investment

and by:

  2.1)    Saving = Income - Consumption

  2.2)    Consumption = Income - Saving


Qualify 1.2 as consumption directed by investors (Ci) and
2.2 as consumption directed by savers (Cs).

When the inflation rate is zero, consumption directed by investors is equal
and opposite to consumption directed by savers:

          Ci + Cs = 0


When the inflation rate is greater than zero, consumption directed by
investors is greater than the consumption directed by savers:

          Ci + Cs > 0


When the inflation rate is less than zero, consumption directed
by investors is less than the consumption directed by savers:

          Ci + Cs < 0


Comments welcomed.

Harry

> Past failure has not persuaded the two Pauls - Samuelson and Davidson -
> that, in principle, the task is impossible.
>
> In this respect, the Ergodicity vs. Non-Ergodicity aspect of their
> respective research agendas mirrors the NKS distinction between
> Computational Reducibility (as in an ideal system exemplified by Say's Law)
> and Irreducibility (as in real-world non-Say's Law systems).
>
> Keynes, in (a) attempting the task with _The General Theory_ and (b) selling
> the result to his peers, fudged the distinction between the two in Chapter I
> as follows:
>
> "I shall argue that the postulates of the classical theory are applicable to
> a special case only [one characterized by Computational Reducibility -
> insert] and not to the general case [characterized by Computational
> Irreducibility - insert], the situation which it assumes being a limiting
> point of the possible positions of equilibrium [the very concept of which is
> meaningless for a system characterized by Computational Irreducibility -
> insert]."
>
> Gunnar
>
>
>
> ----- Original Message -----
> From: "Harry Veeder" <eo200@xxxxxxxxxxxxxxxxxxx>
> To: "post keynesian thought" <pkt@xxxxxxxxxxxxxxxx>
> Sent: Wednesday, October 29, 2003 5:48 PM
> Subject: Re: A Future Economics
>
>
>> Gunnar wrote:
>>
>>> The most egregious example of such failure remains the construction of
> the
>>> Closed-System Say's Law of Markets as an Open-System proposition,
> whereby a
>>> strictly axiomatic or Analytical conclusion is incongruously held to
> have been
>>> 'refuted' by Common Sense appeal to the Empirical phenomenon of
> non-clearing
>>> markets.
>>
>> If Say's law refers to a closed (ideal) system, then isn't about time to
>> draft the laws of an open (real) system?
>>
>> Harry
>>
>>
>>
>
>