Relevant and even prescient commentary on news, politics and the economy.

Trash the AS-AD model, but Leave my AS-ED Model Alone

Olivier Blanchard is criticizing the Aggregate Supply-Aggregate Demand model… “Turning to the supply side, the contraption known as the aggregate demand–aggregate supply model should be eliminated.” (link) Let me show you something good… I am the only one in the world using this model of Effective Demand with Aggregate Supply… What you are looking at […]

Real Rate Integration with Model of Effective Demand

With the temperature reaching 120 degrees here today in Phoenix (almost a record), allow me to have a little fun with my theoretical model of Effective Demand. There are two equations in my effective demand research that will be integrated in this post. First the Effective Demand equation… Effective demand limit upon real GDP = […]

Reality settling in

Looks like the Fed is finally understanding that they are behind the curve and not able to catch up to the curve without triggering an economic contraction. Now we will see how long the business cycle can hold on. I still see an economic contraction starting by 2nd quarter 2017.  Still a 70% chance by […]

A New Model of the Economy Please

Brad DeLong wrote recently concerning the Uncertainty at the Fed… “The heart of the trouble consists in the fact that neither financial-market participants nor, it seems, the Fed itself know the true state of the economy or how best to model it – especially in the wake of the 2008 financial crisis” (link) It is […]

Attractor State of Productive Capacity is Shifting

What is an attractor state? It is a state around which a dynamic system organizes itself. “Self-organization is the spontaneous often seemingly purposeful formation of spatial, temporal, spatiotemporal structures or functions in systems composed of few or many components. In physics, chemistry and biology self-organization occurs in open systems driven away from thermal equilibrium. The […]

Circular Flow of Labor & Capital

In the study of economics, one learns the circular flow of the economy between firms and households. This post however presents another circular flow model based on capital and labor. (It is a closed economy with no government for simplification.) There are 4 pools within this circular flow related to the income and utilization of […]

Internet shedding light on hidden history of Mormonism

The Mormon church reaches out over the whole world to get converts. Their missionaries present pamphlets about their history and doctrines. The pamphlets paint a picture of wholesomeness and purity. Yet the pamphlets are propaganda that distorts historical truth. It is important to know the truth behind Mormonism because members of the church have become […]