Notes on Herd Immunity
from the Coronavirus
Prologue to the Third EDITION of The Theory of Interest: Robertson versus Keynes and The
Long-Period Problem of Saving and Debt
provides a definitive explanation of the way in which the rate of interest is
determined and explains the connection between the central thesis of Keynes’ General Theory
and the economic problems we face today,
Causality in Keynes’ General Theory
It is demonstrated
that by adopting Marshall’s ceteris
methodology Keynes was able to isolate
those factors that, in themselves,
determine the value of each variable in his analysis
at each point in time
and that this made it
possible for Keynes to provide a
logically consistent, causal analysis of dynamic behavior.
It is argued that this required the
rejection of the classical saving-investment/loanable-funds
theory of interest in favor of Keynes’ liquidity preference theory and that to
reject Keynes’ theory is to reject any possibility of providing a logically
consistent, causal analysis of dynamic behavior in economics.
Mr. Keynes and the NeoClassics: A
mathematical structure of Keynes’ aggregate model is outlined, and it is
demonstrated that while the Marshallian roots
of Keynes’s methodology made a causal
analysis of dynamic behavior
possible within the analytic framework developed by Keynes throughout The
General Theory the Walrasian
roots of neoclassical methodology
only allows for a description
of dynamic behavior without explanation
other than through the invocation of a
Keynes on Economic Stagnation and Debt
The purpose of this paper is to explain how
the failure of
neoclassical economics to
arguments with regard to the long-run tendency of the system to trend toward
stagnation and to ignore the problems endemic in the economics of debt
facilitated the adoption of economic
policies in the United States
that contributed to the economic, political, and social problems we face
Robertson Keynes and The
Short-Period Problem of Saving PDF (2019)
It is demonstrated that the only way to make sense
out of Robertson’s dynamic explanation of an increase in saving within the
context of Keynes’ general theory is to assume unit-elastic expectations with an
instantaneous adjustment in the value of output produced. It is argued that
while Robertson appeared to be aware of the issue with regard to the effects of
an increase in saving on expectations, prospective yields, and the demand for
investment goods in his 1940 Essays he ignored these effects in his 1957
Lectures just as they have been ignored by economic policy makers over the past
seventy or eighty years.
A Stock-Flow Model of Keynes’ Theory of
Interest PDF (2019)
A formal model of Keynes’ theory of interest that draws a clear
distinction between stocks and flows is specified in this paper. This model is
used to clarify the confusion that exists within the discipline of economics
with regard to the issues that separated Robertson’s Loanable-Funds and Keynes’
Liquidity-Preference theories of interest. Robertson’s misconceptions with
regard to the nature of Keynes’ theory of interest, and by extension those of
Harry Johnson, Axel Leijonhufvud, George Horwich, Meir Kohn, Sho-Chieh Tsiang
and others who have defended Robertson’s arguments, are explained within the
context of this model.
A Note on Robertson and Tsiang versus
Keynes PDF (2019)
This paper demonstrates
that Tsiang does not reconcile the Robertson/Keynes controversy in Robertson’s
favor in that
Tsiang was confused
in his understanding of Keynes. It also demonstrates that
the liquidity preference
and loanable funds theories as embodied in Tsiang’s model assume that the
rate of interest is a purely monetary phenomenon,
determined solely by the supply and demand for the stock of money, not
the flow of loanable funds.
A Guide to Thomas Piketty’s
Capital in the Twenty-first Century (a work in progress) explains the
theoretical framework developed by Piketty throughout his Capital in the
Twenty-first Century in order to clarify the confusion that has arisen with
regard to this framework. It is hoped that, in so doing, it may help younger
economists and other social scientists to better understand the elegant
simplicity, power, and efficacy of Piketty’s arguments.
Where Did All the Money Go? How Lower Taxes, Less
Government, and Deregulation Redistribute Income and Create Economic Instability
(2014) is an book that is
available in html format below
without charge and
in a Kindle and paperback format at Amazon.com for a nominal contribution to this website.
It examines the way in which the resurrection of
nineteenth century ideology of Free-Market Capitalism led to the
Crash of 2008 through the adoption of economic policies that increased the
concentration of income at the top thereby creating a situation in which, in the absence
of government intervention, the full utilization of our economic resources can
only be achieved in the midst of the kinds of speculative bubbles that lead to
the Crash of 2008 and the economic stagnation that followed.
(Download the FREE Kindle eBook Reader for PCs,
Cell Phones, or Tablets.)
summarized the basic thesis of this book with regard to the fundamental
economic problem we face today.
Ch. 1: Income, Fraud, Instability, and Efficiency
examines how the changes in economic policy since 1970
have contributed to the economic problems we have experience over the past forty
International Finance and Trade examines the ways in which deregulating
international financial markets has affected the U. S. economy since 1970.
Ch. 3: Mass
Production, Income, Exports, and Debt
examines the relationship between mass-production technology, the concentrations
of income, and the accumulation of debt and explains why an increase in the
concentration of income requires an increase in debt relative to income in order
to sustain mass-production technology.
Ch. 4: Going Into Debt explains the nature of financial intermediation and the way in
which we blundered our way into the Great Depression.
Ch. 5: Nineteenth
Century Financial Crises examines the problems of nineteenth century banking, and explains how
a banking system works.
Ch. 6: The Federal
Reserve and Financial Regulation explains the way in which the Federal
Reserve controls the amount of currency available to the economy and why the
experiences of the 1920s and 1930s led to a rejection of the failed nineteenth
century ideology of Free-Market Capitalism in favor of a pragmatic regime of regulated-market
Ch. 7: Rise of the
Shadow Banking System examines the way in which the shadow
banking system evolved as a result of the deregulation that began in the 1970s.
Ch. 8: Mortgages,
Derivatives, and Leverage examines the way in which income streams are
securitized, the nature of financial derivatives, and the way in which financial
derivatives increase leverage and, hence, in the absence of an exchange or clearinghouse,
increase instability in the financial system.
Ch. 9: LTCM and the
Panic of 1998 chronicles the events that occurred during the Panic of
1998 when a single hedge fund, Long-term Capital Management, posed a threat to the financial
stability of the entire world.
Ch. 10: The Crash
of 2008 chronicles the events
that occurred leading up to and during the Crash of 2008 and examines the ways
in which the policy changes that have occurred since 1970 led to this crash.
Ch. 11: Lessons from the Great
Depression discusses the lessons we should have
learned from the Great Depression.
Ch. 12: Less
Government, Lower Taxes, and Deregulation
relationship between Conservative
ideology and economic prosperity over the past one hundred years and summarizes
the arguments in
Where Did All The Money Go?
Summary and Conclusion
summarizes the arguments in
Where Did All
The Money Go? and outlines some of the economic, political, and social
implications of these arguments.
On the Pseudo-Scientific Nature of Friedman’s
Methodology (2016) examines the fallacious
nature of Friedman's as if methodology that assumes a theory cannot be
tested by the realism of its assumptions and attempts to show the extent to
which the acceptance of this methodology has corrupted the discipline of
The Federal Budget
eBook that is
available in html format below without charge and
in a Kindle format at Amazon.com for a nominal contribution to this website.
The purpose of this eBook is to explain the actual, real-world choices faced by
the American people in dealing with the federal budget.
(Download the FREE Kindle eBook Reader for PCs, Phones, or Tablets.)
summarizes the purpose of this
eBook which is to explain the federal budget and to dispel the many myths
propagated with regard to this budget.
Ch. 1: History of the National
Debt explains the relationship
between federal expenditures, revenues, deficits, and the national debt and
examines the history of the national debt from 1916 to the present is then
examined in detail.
Ch. 2: History of the Federal
Budget gives the history of the major expenditure and revenue categories of
the federal budget from 1940 through 2013.
Ch. 3: Human
Resources and Social Insurance
examines the history of the federal budget, and all of the major expenditure and
revenue components of the budget are plotted from 1940 through 2013.
Ch. 4: Welfare,
Tax Expenditures, and Redistribution
examines the way in which welfare,
entitlements, and tax-expenditure entitlements redistribute income within
Ch. 5: Summary and Conclusion
examines the feasible ways that are available to solve our fiscal problems and
the folly of trying to solve these problems by eliminating waste, fraud, and abuse.
Links to Sources
of Data gives links to the various sources of official statistics
discussed in this eBook.
Graphs provides the
The Federal Budget
on a single webpage.
Waste, Fraud, and Abuse in the Federal Budget
(2013) examines the problem of trying to cut the budget through the elimination
of waste, fraud, and abuse.
How a Conservative Would Balance the
Federal Budget (2013) examines a truly remarkable article, written by a conservative economist,
Jeffery Dorfman, and
published in Forbes Magazine on
October 3, 2013. In this article, Dorfman looks at the actual numbers in the
federal budget and explains in a straightforward way exactly how he
believes the federal budget could be balanced. In so doing he has
provided a format in which is possible to cut through the propaganda and hype
and examine the actual choices with which we are faced today. The actual choices
made clear in Dorfman's article are examined in detail in this paper. (This note
is an extension of an earlier comment I made on Dorfman's article. The
original comment can be obtained by clicking on this link.)
A Note on Managing the
Federal Budget (2014) provides a brief explanation
of the way in which the federal budget should be managed.
OMB Budget Tables 3.1, 3.2, and 11.3
provides the federal functional budget outlays outlays for 2015 in absolute
amounts and as a percent of total federal outlays and GDP.
Budget Projections, Federal Debt,
Social Security, and Medicare
(2014) shows how the
CBO's budget projections provide a broad framework
within which to understand our fiscal problems, and that within this framework
we are driven to two inescapable conclusions: The first is that it is
going to be impossible to maintain Social Security and Medicare without dramatic
cuts in the benefits of these programs in the future unless we increase taxes. The second is that even if we do raise taxes it is going to be impossible to
maintain the benefits of Medicare if we don't find a way to control the rising
cost of healthcare in the private sector of the economy. The
spreadsheets that are used to make the calculations can be downloaded by
clicking on this link, and the
simulation model that is used in this note is
explained in Simulating the CBO’s Budget
Simulating the CBO’s
Budget Projection Scenarios
(2014) explains the simulation model that is
Budget Projections, Federal Debt,
Social Security, and Medicare.
Social Security, Healthcare, and
Taxes (2014) examines the history of the Social Security System
since 1980 and the issues confronting Social Security today. It provides an in depth examination of the issues raised by
Moment of Truth report written by
Alan Simpson and
Erskine Bowles. The recommendation
in this report are examined in detail and the way in which they affect Social Security are
The Simpson-Bowles Solution to the Deficit Problem
(2010) examines the bipartisan
Moment of Truth report written by
Alan Simpson and
This report puts forth a set of recommendations that purport to deal with the
federal deficit and debt problems in a comprehensive way. The implications of
the recommendations regarding Social Security, Medicare, and revisions of the
tax code are explained.
A Note on Taxing Corporations
(2011) examines some of the arguments against taxing corporations and explains why
they should be taxed.
Government Employment Trends and
Statistics (2013) gives a breakdown of federal, state, and local
government employees from 1962 through 2011.
Penney Wise and Pound
provides brief discussion of the important of numbers and keeping numbers in
perspective in understanding the economic system.
Having Our Cake and Eating it too (2013)
examines the conflict faced by the
American people in attempting to solve the federal deficit problem.
Economics of Nuclear Power (2013)
explains the problems that must be overcome in order to produce nuclear power in
a safe and cost effective manner.
On the Sophistry of
Frederick C. Thayer
(2015) examines Thayer's mythological notion that
the "consistent pattern of balance the budget-reduce the national debt have a
big depression is anything other than a set of coincidences."
Pollution, Natural Resources, and Ideology (2011)
explains why government intervention is necessary to deal with the problems of
pollution and managing our nonrenewable natural resources.
The Keynesian World War II
Myth examines the belief that the expenditure policies of World War II validated the
Keynesian notion mass unemployment had a simple cause, inadequate demand, and an
easy solution, expansionary fiscal policy.
Appendix on International Exchange
(2014) is the Appendix on International Trade from
Where Did All The Money Go?
Wealth Transfers and the Crash of 2008
(2008) explains the mechanisms by which the housing bubble bursting transferred
wealth among people following the Crash of 2008.
Measuring Aggregate Variables
(2010) elaborates on of some of the
more technical aspects of measuring total output and the average price level. It
also examines the relationship between changes in GDP, productivity, and
CDS Market and Market Efficiency (2010)
examines the rational for the CDS market and finds it wanting. This is not
a very reader friendly paper in that it deals with some rather technical
Then and Now:
paper read at the
Boston Symposium on Economics sponsored by the Northeastern University
A Primer on Economic Crises (2008/2009) chronicles
the events that led to the 2008 financial crash as they were revealed in the
congressional hearings in the fall of 2008, explains the economic forces that
brought about this crash, and how the crisis created by this crash is
contributing to the recession that followed. Particular attention is paid to
vocabulary with links to the definitions of esoteric terms and acronyms that
appear in the news and to detailed explanations of the fundamental economic
principles that determine the course of financial crises and economic
recessions. The effectiveness of the various proposals that have been offered to
deal with this crisis, the kinds of wealth transfers implicit in each of these
proposals, and the kinds of things the government should be doing to cope with
this crisis are examined. This paper consists of a four part series the
individual parts of which are:
Part I: Origins of the Crash
explains the fundamental causes of the financial crisis that were brought out
during the Congressional hearings in the fall of 2008.
Part II: The Nature of Financial Institutions
explains the nature of financial institutions and why their existence depend
crucially on the confidence people have in them.
Part III: Bailing
Out the Financial System
evaluates the various proposals for bailing out the financial system.
Part IV: The Challenge Ahead
evaluates the options available to deal with the ensuing economic recession
that is the inevitable consequence of the financial crisis.
Liquidity-Preference/Loanable-Funds and The Long-Period Problem of Saving
re-examines the central issue of the liquidity-preference/loanable-funds
controversy in an attempt to provide a definitive explanation of the way in
which the rate of interest is determined and to explain why the failure to
understand understand the central issue of this controversy led mainstream
economists to recommend economic policies over the past forty years that
culminated in the Crash of 2008 and brought about the economic stagnation we are
in the midst of today.
and Keynes’ Long-period Problem of Saving (2016)
provides a synopsis of the arguments and analysis presented in
Where Did All The Money Go?,
Liquidity-Preference/Loanable-Funds and The Long-Period Problem of Saving,
and A Note on Keynes’ General Theory of Employment,
Interest, Money, and Prices as these arguments
relate to the economic stagnation we see today.
Annotated Bibliography provides an alphabetical listing of books by author.
I give a very short, one or two sentence summary of each book, and the title of
each book is linked, whenever possible, to reviews by readers that are published
by Amazon.com. These reviews will give
you some idea of what others think. The author's name is generally linked to an
online biography of the author.
Bibliography lists books and videos of the congressional
hearings referred to in the papers on this website and is broken down into various categories.
Most of the videos are stored in
C-SPAN's archive and can be viewed on your computer by clicking on the
corresponding link. Links to other online videos that are relevant are also provided.
Where The Factories Used To Be shows how the
failure to regulate international capital flows have affected Flint Michigan.