Chapter 3. The End of Economics

Reinventing Economics

Let us repeat that the global economy is a reality—it's not a theory. But so many of those who should know better, especially those whom people expect to know better, seem to be still asleep. The majority of the world's economists remain cocooned in a pleasant dream.

The old economy grew up to explain the relationships between demand and supply, and supply and employment. It tried to explain how supply/production and inventory increase as the interest rate or money supply changes. Because the economists are convinced that the equations among these factors are well established, they can recommend that politicians and bureaucrats use one or more factors to influence the other, to generate employment, ...

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