Eight, all macroeconomic regulation and control are wrong
Abstract: The mistake ofmacroeconomic theory is mainly because it is based on the wrong assumptions,and excludes the influence of all supply factors on the economy. The wrongtheory of regulation is naturally not good. Specifically: the regulation of expanding demand is wrong. The financialstabilizer is actually a set of "wrong", "lazy" and"bad" mechanisms. The economic cycle itself and the macro-controlhave a "time and space" contradiction. Therefore, all macroeconomic regulation andcontrol is wrong.
First of all, it should be notedthat macroeconomic regulation and control in economics is the regulation oftotal quantity. It is an economic term, not a vocabulary of "macro"such as "large-scale", high-level, and top-level. The object of criticism in this paper is thedrawbacks of total regulation.
The author also knows that to dosuch a topic, the topic is a bit large, and it is simply an enemy of themartial arts of the entire economics. Ifthere is no shackles, allies, or weapons such as the Dragon Slayer and theEternal Sword, they will certainly be outnumbered and drowned by the people'ssaliva.
Therefore, before officiallycriticizing the total regulation, we must first introduce our allies, the"differentiated" economic theory.
I believe that everyone is nostranger to the microeconomic difference. From a micro perspective, the realsociety is a world full of differences, the world of products is verydifferent, and the world of people is ever-changing. Different products have different forms,performances, uses, values and technical contents, etc. Different people have different personalities,hobbies, ideas, talents, work abilities, and so on.
What impact does the micro-worlddifference have on macroeconomics?
In the state of productdifferentiation, in terms of demand, when the individual's income increases,the quantity used to purchase products in various industries does notnecessarily increase in proportion; when the expenditure for purchasingdifferent products increases, the price of different products will also bedifferent. Reaction. Therefore, thetotal expenditure is changed, and the corresponding expenditures for productsin a single industry generally do not change in the same proportion. Inparticular, there is a big difference in the elasticity of demand betweenemerging industrial products and traditional industrial products.
In the state of labor differences, thetransformation of workers' skills is not an easy task. In particular, the laborof many special positions cannot be exchanged in different industries, so therewill be some surplus labor in the sunset industry. Some of the laborers in thesunrise industry are in short supply. Therefore, both the macroeconomic output and the employment volumecannot be increased or decreased in the same proportion.
If the product differentiation ismoved into the industrial economy, it is a set of "product life economiccycle theory." The product lifecycle theory was created in 1968 by Harvard University professor Mond Vernon.It compares the state of the economy to life: it believes that products, likehuman life, experience a cycle of formation, growth, maturity, and decline.
Specifically, a product is generally divided into fourphases in its economic life cycle:
Introduction period: The product is put into production from the time ofdesign and put into production. Theproducts at this stage are obviously scarce in production and have a largemarket growth space.
Growth period: Whenthe product passes the introduction period and the sales test sales succeeds,it enters the growth period. Productsupply and demand at this stage have grown strongly, and product output hasbeen increasing rapidly.Maturity: After the growth period,in terms of supply, the products enter the mass production and enter the marketsteadily; on the demand side, as the number of people purchasing the productsincreases, the market demand becomes saturated, and the products enter themature stage.
The recession period means that the product hasentered the slow-moving stage. With thedevelopment of technology, the emergence of alternatives and new products inthe market, the customer's consumption habits have changed. At this time, the products have been aging inthe market and cannot meet the market demand. The market has been replaced byother new products with better performance and lower prices, and the salesvolume of the products continues to decline.
How does a product affect themacro (total) economy during its life cycle?
Duringthe introduction period, although the product grows fast, due to the lowoutput, the contribution to the total economic growth is a small amount ofplutonium;
In the growth period of the product, as the mass productionbegins, the output value will rise rapidly, which will lead to a rapid increasein the total economy;
Although the output growth during the product saturationperiod has begun to slow down, as a pillar industry, the base is large, and itwill become the main force of economic growth;
In the recession period and slow-moving period ofproducts, the output value begins to decline, so it will become a force foreconomic recession.
The above is a brief descriptionof the "differentiated" economic theory. Those who are interested inlearning more about this theory can refer to my own monograph "Thehomogenization" and "differentiation" of countercyclicalregulation, through comparative differentiation and the same The regulationeffect in the qualitative environment analyzes the shortcomings of allmacro-control policies.
8.1 expanding the demand is wrong
Expanding demand is the mostimportant policy tool in macroeconomic regulation and control, according to theinference of macroeconomics in the textbook: Assume that in the economiccrisis, the government expands consumption by increasing spending by 100million yuan. The standard thinkingparadigm under the premise of Keynesian homogeneity. In a marginal propensity to consume 0.8,regardless of taxation, the economy can produce a multiplier effect of 5 times.
The entire fiscal stimuluswill increase the income of the economy by 500 million yuan and the consumptionof 500 million yuan. The savings (or inventory) will not change at all, and theoutcome will be perfect.
However, this so-called "perfect" is only under the assumptionof "homogeneity", macroeconomics says the propaganda of theinvestment multiplier in the textbook. If we put the same expenditure in a "differentiated" context,we can at least find three places that are "not perfect":
First, in the context of “differentiation”, there is a difference in residents’ income and consumption propensity. In the“ineffective demand”, the daily consumption of the affluent classis saturated, and they only participate in income distribution in the effect ofexpanding demand. , but will not increase consumption. Therefore, the actual multiplier effect ofexpanding demand may be less than half of the theoretical expectation, and itsinvestment multiplier is less than 2.5 times;
Second, in the multiplier effect of expanding demand, it will also promotethe increase of savings, which means that the inventory of surplus productswill increase, and the problem of surplus will be more serious after thestimulus;
Third, in the context of “differentiation”, investment in the introduction, growth, maturity,and recession industries has significantly different multiplier effects atdifferent cycle stages. If the samefunds are used to invest in the development of new products, the investmentmultiplier may reach several times the effect of expanding the demandmultiplier. It is also possible to optimize the industrial structure and reducethe excess capacity without the government's sequelae of simply expanding thetotal demand. . Therefore, the"industry upgrade" type of intervention mode should be significantlybetter than the total intervention mode of expanding consumption.
Of course, the theoretical derivation of this is very complicated.Interested friends can refer to the counter-cyclical regulation of"homogeneity" and "differentiation" published by myself.