Sunday, January 15, 2012

SIMON WREN-LEWIS mixing metaphors

If S = I is an equilibrium condition, only true if we integrate over a cycle, then you have a macro model.
No, he says, there exists a central bank.  Did he integrate the central bank over time?
No, he does not, central banks are a constant, and accounting identity.

Sorry you have to pick a macro model and stay with it. Whatever economic force you pick to cause integration over time must apply to the central bank. The central bank is never actually in equilibrium, like the rest of the economy, and its variations from equilibrium will mirror the economy.

Economists need some explanation here.  I= S is always trule by definition, the economists picks a model with a measuring norm, then sets I=S under the norm and goes on.

As long as the entire collected set of economic acts is complete, dense in the range, has a fixed point, yada yada, then all works. But you cannot change norms in mid-stream.

Here at Imagisoft we have a solution, we will verify and monitor, for a fee, any economist who studies the particular MIT series on Hilbert Spaces. And in fact, we encourage MIT to come out with a modified series on Hilbert Spaces, a course series designed just for the advanced PHD economists.

What about Steve Keen's model?

I am too lazy to go into detail, however, it appears on glance that he uses a single norm, he just computes that norm a little differently for the central bank. Perfectly fine, and more fine still if the new computation can be more accurate for the sector being modeled.

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