Missing Link in Economics Revealed!

by Mark Skousen on September 15, 2014

by Mark Skousen
Presidential Fellow, Chapman University

For centuries economists have been searching for the missing link that would tie microeconomics (theory of the firm and individual behavior) with macroeconomics (theory of the economy as a whole).

I believe my four-stage model of the economy does just that.  Based on Austrian macroeconomics (known as Hayek’s triangles), I created a four-stage model of the macro economy in my book, The Structure of Production (NYU Press, 1990).  A few years later, John Taylor of Stanford University (famous for his Taylor Rule) independently produced a 4-stage micro model involving four stages in the production of Caribou Coffee.

A eureka moment!

I’ve incorporated both 4-stage micro and macro models in my textbook, Economic Logic (Capital Press, 2014), now in its 4th edition.  See especially chapter 14:  <http://www.amazon.com/Economic-Logic-Fourth-Edition-Skousen/dp/1621572226 It’s available in book print and Kindle.  If you want to buy it at a discount for only $34.95 plus S&H, call Eagle Publishing at 1-800-211-7661, and use code ECONL6.

SKOUSEN – TAYLOR LINK MACRO WITH MICRO

Figure 1.  Universal 4-stage Macro Model of the Economy

Source:  Mark Skousen, The Structure of Production (New York University Press, 1990); Economic Logic (Capital Press, 2014).

 

 

 

 

 

Figure 2.  4-stage micro model (production process of Caribou Coffee) 

Source:  John B. Taylor, Economics, 5th edition (Boston:  Houghton Mifflin, 2006)

{ 0 comments }

U.S. Economy Doing Better Than Expected

by Mark Skousen on August 1, 2014

U. S. ECONOMIC ACTIVITY HOLDS STEADY IN 1ST QUARTER 2014

Washington, DC –  Gross Output, a broader measure of  U. S. economic activity published by the Bureau of Economic Analysis, held steady at $30,210.6 billion in the first quarter of 2014.

“The GO data demonstrates that the economy is not as bad off as GDP figures initially suggested,” stated Mark Skousen, editor of Forecasts & Strategies and a Presidential Fellow at Chapman University, who champions Gross Output as a more comprehensive measure of economic activity.   He introduced Gross Output as a macroeconomic tool in his work The Structure of Production (New York University Press, 1990).  Now the BEA publishes GO on a quarterly basis in its “GDP by Industry” data.

The GO data was released by the BEA on Friday, July 25, 2014:  http://www.bea.gov/iTable/iTable.cfm?ReqID=51&step=1#reqid=51&step=51&isuri=1&5114=q&5102=15 [click to continue…]

{ 0 comments }

FreedomFest 2014 Report

July 31, 2014

Over 2,000 Look to Private Solutions at This Year’s “Greatest Libertarian Show on Earth” By Mark Skousen Producer, FreedomFest “This was my seventh FreedomFest, and the best ever. It’s turned into an annual reunion with old friends and new who come from all over the country and the world.  There’s nothing like it.”   –Gene Epstein, [...]

Read the full article →

Open Letter to All Freedom Lovers

June 2, 2014

From Mark Skousen, producer of FreedomFest I woke up this morning thinking about “Why We Need to Get Together Once a Year.“  Over the years, I’ve been impressed with the proliferation of free-market think tanks and freedom organizations which are doing their part to make a difference:  publishing websites, special reports and books; holding meetings [...]

Read the full article →

Marx Madness is Back

May 28, 2014

“Capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine democratic societies.” — Thomas Piketty, “Capital in the 21st Century” (2014) The Economist magazine rightly called French professor Thomas Piketty the new Marx, although a watered down Marx. His bestseller (rated #1 on Amazon and the New York Times) is a thick volume with the [...]

Read the full article →

Economist Makes Lead Story in the Wall Street Journal….Barron’s….and Forbes

April 28, 2014

I made the lead story in the Wednesday, April 23, 2014, edition of the Wall Street Journal.  The title:  “At Last, a Better Economic Measure.”  You can read it here:  http://on.wsj.com/PsdoLM The editors of the WSJ don’t allow the author to see or approve the headline or subhead, but they nailed it perfect.  And I [...]

Read the full article →

Steve Forbes Endorses My Gross Output Statistic

April 23, 2014

“Mark Skousen’s Gross Output statistic…will have a profound and manifestly positive impact on economic policy and politics.”  — Steve Forbes, Forbes magazine, April 14, 2014 The Bureau of Economic Analysis will start releasing Gross Output (GO) along with GDP every quarter starting on Friday, April 25.  I consider it a triumph in supply side “Austrian” [...]

Read the full article →

Chapman Students Are Surprised by the Answer to My Environmental Question

February 25, 2014

In January, my wife and I had the opportunity to teach at Chapman University, where I am a Presidential Fellow for 2014.  She taught a class in poetry, and I taught “Modern Political Economy:  Who is Winning the Battle of Ideas?”  I used my textbook, “The Making of Modern Economics,” now in its 2nd edition. One [...]

Read the full article →

A Personal Triumph 25 Years in the Making with Launch of New Macro Statistic

December 2, 2013

For the first time since World War II, the Federal government (Bureau of Economic Analysis) will begin publishing a new macro statistic Gross Output [GO] starting in spring 2014 at the same time it releases its quarterly GDP data. Forbes.com article has just published my article on this new statistic “Beyond GDP“: http://www.forbes.com/sites/realspin/2013/11/29/beyond-gdp-get-ready-for-a-new-way-to-measure-the-economy/ A shortened [...]

Read the full article →

JFK Assassination: I Remember the Day

November 22, 2013

What were you doing 50 years ago on the day President Kennedy was assassinated? I remember it well. I was a junior at Sunset High School in Portland, Oregon, and was sitting with my girl friend Mary Craner in the library when the monitor came on with Walter Cronkite announcing that the President had been [...]

Read the full article →