Toward the Integration of Economic Science: Main Page: Summary and Contents

Current mainstream economics still contains too many inappropriate 19th century concepts, confusions and contradictions. To meet effectively the challenges of the 21st century we can no longer afford to play abstract hypothetical games; we must develop a genuine economic science, with functionally appropriate concepts and explanations of relationships. We owe it to our students as well as our grandchildren.

The Integrated Dynamic Money Flow model (IDMF) offers a precise conceptual distinction between money and credit which makes possible a functionally appropriate definition of money, a functional analysis of the transmission mechanism between money growth and GNP growth, and a functionally-appropriate formula for noninflationary monetary growth. Its primary credit concept bridges the Keynesian and national income accounts financial gap begtween saving and investment, and provides the analytical basis for the Stabilization Tax Adjustment fiscal policy tool to maintain stable low interest rates. Its structural model of the economy, growth-trend perspective and graphic approach facilitate analysis of economic fluctuations and the formulation of policies to achieve and maintain structural balance.

The IDMF conceptual framework provides the basis for effective integration of our national economic accounts, and thus for empirical determination of many questions which are now answered with mere speculation.

1. Introduction and Overview
   1. Introduction
      1. The unfinished revolution
      2. The present disarray
      3. Econ. 101
      4. Requirements for economic science
   2. Overview
      1. Part I analyzes the nature and sources of traditional conceptual confusions
      2. Part II describes the Integrated Dynamic Money-Flow (IDMF) model
         1. The non-credit ("pseudo-commodity") concept of money and monetary creation
         2. The Money Demand Ratio (MDR)
         3. The Primary Credit concept
         4. The structural model of saving, investment and monetary flows and stocks
         5. The growth-trend perspective
         6. The graphic approach to economic analysis
      3. Part III explains the main policy applications of the IDMF model

2. The Keynesian model
   1. The problem with the Keynesian model
   2. The financial gap in the NI perspective
      1. The Keynesian/NI equations
   3. The credit-money conceptual confusion
   4. Exogeneity and the multiplier
   5. Investment/saving relationships
      1. The assumed saving/investment dichotomy
      2. The Keynesian focus on business investment
      3. Gross vs net investment
      4. Household Investment
      5. Government investment
   6. Policy confusions
   7. Political liabilities

3. The Integrated Dynamic Money-Flow (IDMF) model
   1. The integrated circular-flow concepts
      1. Credit Market and Primary Credit flows
      2. Monetary Authority
      3. Money stock
      4. Intra-sector money-flows
   2. The IDMF sources-and-uses-of-funds equations
   3. Money vs Credit
      1. The IDMF non-credit concept of money
      2. Money Criteria
         1. Is it actually used as medium of exchange?
         2. Is it actually created in bank lending?
         3. Is its amount actually controlled by the Monetary Agency?
   4. Money as inventory
      1. The money demand ratio (MDR)
      2. The New Money Equivalent (NME) of MDR changes
   5. The Money/Income Multiplier (MIM)
   6. The IDMF equation relating money growth to GNP growth
      1. Forecasting capability
   7. Interest rates
   8. The IDMF structural model
   9. Elastic credit demand
   10. IDMF vs NBER 'business cycle" analysis
   11. Institutional assumptions

4. Policy Applications of the IDMF Model
   1. Purpose of the IDMF model
   2. Broad policy objectives
      1. Better economic statistics
      2. Stable non-inflationary, full-employment economic growth
         1. Money-growth formula (Figure 9)
      3. Stable low interest rates
      4. Stable prices (and economically appropriate wage rates)
      5. Structural balance
      6. International economic coordination
      7. Greater economic democracy
      8. Global responsibility
      9. Ecological sustainability

5. Appendices
   1. APPENDIX A. Economic requirements for Ecological Sustainability

   2. APPENDIX B. Further Notes on Keynesian Economics
      1. Classical equilibrium analysis
      2. Interest rates, liquidity preference and economic growth
      3. Assumption of diminishing returns

   3. APPENDIX C. Studies and Papers Based on the New Analytical System and Policy Proposals (by John Atlee)
      1. Macroeconomic Analysis (Theory) and Policy Implications
      2. Coordinated Policy Proposals
      3. Monetary Policy
      4. Fiscal Policy
      5. Inflation Analysis and Policy
      6. Monetary Analysis
      7. Primary Credit Analysis
      8. Budget Analysis
      9. Not Elsewhere Classified

   4. APPENDIX D. Figures (with link to reference in text) -- non-linked figures have not been scanned in yet.
      1. The Relationship of Money Flows and Stocks To the Circular Flow of Income and Spending
      2. Consumer Sector Money Flows
      3. Business Money Flows
      4. Government Money Flows
      5. The Money Demand Ratio, 1960-82
      6. The Relationship of Money Supply, Money Demand, Real Economic Growth and Inflation, 1960-82
      7. "Monetary Forecast" of Economic Growth, a worksheet
      8. Capital Money Flows
      9. The Money Growth Formula
      10. Comparison of "Rule of Thumb" Recovery-Component for Money Supply Formula with Actual Recovery Component
      11. Economic Fluctuations in a Growth Perspective

   5. APPENDIX E. IEA POCKET CHARTS
      1. How to Read IEA Charts
      2. Descriptive Notes
      3. Analytical Highlights
      4. Debt and Asset Cumulations (Historical Supplement)
      5. GNP Expenditure and Income Cumulations (Historical Supplement)
      6. Monthly Charts