If the way to analyze the economy is the macro perspective, then economically, why aren’t we looking at the monetary and financial paradigm? Paradigms are the entire macro-pattern and its temporal universe effects.
All current economic theories are based on micro-foundations as the link to a Steve Keen video below shows. He suggests deriving macro only from macro. That’s fine, but then why are we not deciphering the current monetary and financial paradigm and then trying to find a new paradigm to replace it?
Paradigms being both the conceptual essence of a body of knowledge/area of human endeavor and its temporal effects IS THE QUINTESSENTIAL MACRO PERSPECTIVE, NO?
In fact the title of the last power point slide in the above video is entitled Building a New Paradigm in Economics.
The problem of course is Keen and no one else has discovered the new economic insight of the integrative problem resolving power of a high percentage discount/rebate monetary policy at the point of retail sale, which is also the very expression of the new paradigm of Direct and Reciprocal Monetary Gifting, and so progress flounders at best and at worst insures that we run lemming-like over the cliff of economic collapse and ecological suicide.
To paraphrase Richard III’s lament: “An insight, an insight, the economy and the planet for an insight.”
Keen (are you listening Steve) should model monetary gifting directly to the individual in the form of a universal dividend and directly and reciprocally at the point of retail sale in Minsky and in his Godley tables and as new reserve accounts at the central bank labeled Dividend Distributions and for retail enterprise labeled Discounts/Rebates and see how the policies of a universal dividend and a 50% discount/rebate policies at retail sale resolve our deepest economic problems.
6-7 years ago when I was posting to his blog about the importance of examining the economy and money system from a cost accounting perspective he suddenly realized the importance of double entry bookkeeping and the fact that economists could get their PhD and never have to take so much as a rudimentary class in accounting.
Understanding accounting is the ultimate grounding discipline for the abstract mathematical and theoretical fugues that economists and pundits fall into by helping them to focus on the actual temporal process of the economy where they might cognite on the significance of the ending, summing and terminal expression point of retail sale (it’s where production becomes consumption after all) and for economic factors like cost, price, aggregate demand and inflation, and how a monetary policy at that point is so consequently powerful.
Problems are complex. Solutions, particularly integrative ones like paradigm changes are always simple, elemental and permanently progressive.