Market Myths in Contemporary Economics

Punabantu, Siize (2010): Market Myths in Contemporary Economics. Published in:

Abstract

This paper elaborates on the economic operating system (EOS) the role it can play in growth. It focuses on markets, price determination and forces of demand and supply in order to illustrate how an EOS model offers greater economic growth, stability and safety. It delves into market theory to determine whether what is commonly understood about market forces and free markets in contemporary economics is as reliable as might be expected; do free markets encourage or retard economic growth? It is often, for amusement, brought up how modern medicine despite its advances cannot cure the common cold. Contemporary economics has a similar pet peeve; it does not know how to cure common inflation and deflation. The same way medicine leaves the body’s immune system to deal with colds until a cure is found contemporary economics leaves inflation and deflation to market forces to sort out with the occasional booster shot of intervention when this process seems to fail. To this day the stand off between Keynesian and Monetarist models demonstrates the irascible nature of this economic bug; it seems in contemporary economics there is only one way to control it and that’s do nothing about it. This nothing in contemporary economics is what is referred to as free markets. Allowing free markets to set prices and act as a mechanism for managing inflation works, what doesn’t work is that free markets systems based on a Monetarist model lack reliable growth and not being able to do anything comprehensive when market forces begin to act up. In a downturn, suddenly the liberty of free markets can become a threat to economic stability. Free markets may work best in an economic operating system (EOS) model better able to exploit the efficiency of markets. whilst accelerating economic growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: Scarcity; banking; credit creation; banks; open market operations; resource creation; implosion; wobble effect; economic thought; poverty; wealth; equation of exchange; cost curve; market efficiency; supply; demand; money; price; mark-up; cost plus pricing; rationality; operating level economics; economic growth; expenditure fallacy; paradox.
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics > D11 - Consumer Economics: Theory; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes ; Keynesian ; Post-Keynesian; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D40 - General; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy ; Stabilization ; Treasury Policy; G - Financial Economics > G0 - General > G01 - Financial Crises; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory ; Matching Theory; H - Public Economics > H6 - National Budget, Deficit, and Debt > H60 - General; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E50 - General; D - Microeconomics > D6 - Welfare Economics > D61 - Allocative Efficiency ; Cost-Benefit Analysis; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E40 - General; D - Microeconomics > D0 - General > D01 - Microeconomic Behavior: Underlying Principles; F - International Economics > F3 - International Finance > F31 - Foreign Exchange

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