The Origins of Economic Growth: The Fundamental Interaction Between Material and Nonmaterial Values

ISBN-13: 9783642645204 / Angielski / Miękka / 2011 / 234 str.

Arvid Aulin

Opis

Dealing with factors affecting economic growth in knowledge-based societies, the author shows that the interaction between material and nonmaterial values is the ultimate source of all economic growth. The model thus developed predicts the quantitative facts concerning business cycles better than the conventional real-cycle models, while also producing a new growth path whose existence is verified by empirical facts. The results provide strong evidence of the economic relevance of nonmaterial values, and also prompt a new view of the stochastic elements in the business cycles.

Spis treści

1 An Introduction to Nonmaterial Values.- I. Knowledge as the Basic Nonmaterial Value of the Supply Side.- 1. Human Capital as Accumulated Exact Knowledge.- 2. The Formation of Exact Scientific Knowledge.- 1. The strategy of mathematical generalization.- 2. A short history of fundamental exact science.- 3. The unique properties of theoretical knowledge in exact sciences.- 3. Practical Sciences Applying Exact Science.- 1. Practicality as the original criterion of objectivity.- 2. Practical sciences today.- II. Nonmaterial Values of the Demand Side.- 4. The Human Need for Self-Expression.- 1. Subjective and objective knowledge.- 2. Commenting sciences.- 3. The pursuit of self-expression as the fundamental nonmaterial value of the demand side.- 5. The Historical Process from Philosophical Self-Expression to Exact Science.- 1. The linguistic method of classical Greek philosophy.- 2. The influence of the myth of the eternal return upon Greek philosophy.- 3. The first challengers of the ”philosophical method”.- 4. Newton’s physics doomed ”philosophically false”.- 5. Newton’s physics as ”philosophically true” to Immanuel Kant.- 6. The triumph of exact science over the ”philosophical method” since 19th century.- 7. What mean the terms ’supply side’ and ’demand side’ in connection of nonmaterial values?.- 2 The Interaction of Material and Nonmaterial Values as the Source of Economic Growth and Business Cycles.- III. A Necessary Extension of Economics.- 6. Facts.- 7. Conclusions.- 8. Is This Economics?.- IV. The Mathematical Tools.- 9. The Hamilton-Jacobi Theory.- 1. The Hamiltonian function.- 2. The Lagrangian function.- 3. The action principle.- 4. The Legendre function.- 5. Transversality conditions.- 6. The ”principle of the largest action”.- 10. The Maximization of Accumulated Utility.- 1. Canonical equations for discounted utilities.- 2. The Solow growth model revisited.- 3. The parameter conditions of transversality in the Solow model.- 4. The Arrow-Kurz generalization.- V. The Lucasian Mechanics of Economic Development and Its Extension to Nonmaterial Values.- 11. Growth Theory as Based on Rational Expectations.- 1. The reaction of the market to common knowledge.- 2. The market clearing.- 12. The Extension of Lucasian Mechanics to Nonmaterial Values.- 1. The first axiom of generalization.- 2. The fundamental equations.- 3. The second axiom of generalization.- 4. The derivation of a general solution algorithm.- 5. The natural boundary conditions.- 6. The Legendre condition.- 7. Transversality conditions.- VI. The Fundamental Dynamics of Economic Growth and the Business Cycles.- 13. The Basic Growth Paths.- 1. The balanced growth path: Growth Type 1.- 2. The path of logistically rising productivity of capital: Growth Type 2.- 3. Verification by the Solow (1957) material.- 14. The Basic Business Cycles.- 1. The state-plane and the cycle center.- 2. The decreasing relative size of the cycles.- 3. The existence of well-behaving general solutions.- 4. The invariance group and the time scale.- 5. The detrended cycle functions.- 6. The minimums and maximums of the cycle functions.- VII. The Basic Business Cycles as the Causal Part of the Business Cycles.- 15. The Predictive Power of the Basic Cycles Compared With That of the Stochastic Models: Ordinary Business Cycles.- 1. The linear approximation of the Basic Business Cycles.- 2. Comparisons with empirical correlations and variances.- 3. Comparisons with empirical autocorrelations.- 16. Conclusions and Challenges.- 1. The two levels of macroeconomic theory.- 2. Economic stability.- 3. Are real business cycle theories outdated?.- 17. The Dynamics of Anomalous Business Cycles and Their Quantitative Verification.- 1. Fundamental theory vs model construction in economics.- 2. The method of calculation.- 3. The fall in procyclicality of consumption and investment.- 4. The retained high procyclicality of employment.- 5. An appraisal of the results.- VIII. The Growth Effects of Nonmaterial Values and the Trade-Off between Growth and Stability.- 18. Primary Causal Factors of Economic Growth.- 1. The reduction to human capital.- 2. The freedom factor.- 3. The three ultimate determinants of the level of national economy.- 4. The form of the function b(?, ?, ?).- 19. The Growth and Stability Effects of Savings Rate.- 1. Which is the causal order of parameters?.- 2. The existence of the growth effects of savings rate.- 3. An empirical test.- 4. The slowdown of the growth of labour productivity in the long run.- IX. An Alternative Vision of the Stochastic Element in the Business Cycles.- 20. Stochastic Shocks as Perturbations Superposed upon the Basic Business Cycles.- 1. Are the business cycles purely stochastic processes?.- 2. The production of random series with a definite mean and standard deviation.- 3. How the technological shocks affect each economic variable?.- 21. Final Result: Both the Stochastic and Nonstochastic BBC Versions Predict Better Than Any of the Models Based on Stochastic Optimization.- 1. Correlations and variances of stochastic cycle functions over a cycle: the formulae.- 2. Preliminary steps of calculation.- 3. Calibration.- 4. The small but not negligible effect of shocks.- 5. The final result in numbers: Table 12.- 6. The final result illustrated: Figures 9 and 10.- 7. Final comments.- References (Part 2).- Appendix 1 (Part 2).- Appendix 2 (Part 2).- 3 The Historical Interaction between Economic Development and Nonmaterial Values.- X. Human Actor.- 22. A Theory of Acts.- 1. Acts as the means of interaction between the self and the outer world.- 2. The mathematical representation of acts.- 3. The mathematical representation of values, norms and beliefs.- 23. Universal Causality.- 1. The axiom of universal causality.- 2. The concerted action of several actors.- 3. The dual causality of human actors.- 4. A limitation to the causal analysis of human actors.- XI. Cybernetic Entropy Laws of Actor-Systems.- 24. The Law of Requisite Variety (Ashby).- 1. The Disturber and the Regulator.- 2. The survival of a living being as a problem of regulation of external disturbances.- 3. Ashby’s entropy law.- 25. The Law of Requisite Hierarchy.- 1. The improvement of regulation by a hierarchy of regulation and control.- 2. Increasing social hierarchy in stagnant societies.- 3. Decreasing social hierarchy in advanced societies.- References (Chapter XI).- XII. The Entropy Laws of Individual Freedom.- 26. The Natural Limits to Individual Freedom Determined by Economic Development.- 1. The cultural impact on individual freedom.- 2. An entropy measure of individual freedom.- 27. The Decreasing Individual Freedom in Societies of Stagnant Economy (FINAL RESULT I).- (1) The defining characteristics.- (2) The vicious circle of underdevelopment.- (3) The collapse of economy and the disintegration of society.- 28. The Increasing Individual Freedom in Societies of Economic Growth (FINAL RESULT II).- (1) The defining characteristics.- (2) The virtuous circle of economic development.- (3) The governable society.- (4) Crises of governability.- (5) Social revolution as a loss of governability.- (6) Social effects of an environmental catastrophe.- References (Chapter XII).- XIII. World History Revisited in View of the Entropy Laws.- 29. The East and the West: Two Different Worlds.- 30 The Eastern Tradition of Stagnant Societies.- 1. The archaic world.- 2. How Russia cut itself off from the West.- 3. The development of Russian totalitarianism.- 31. The Relaxed Hierarchy of Western Feudalism.- 1. The separation of divine and earthly powers.- 2. The continental feudal state.- 32. The Birth of the Middle Class and Local Democracy in Medieval England.- 33. The End of Feudalism and the Increased Economic Growth in England.- 1. Medieval English parliament.- 2. The rise of independent farmers and city bourgeoisie.- 34. The Birth of Western Parliamentarism and Freedom of Speech in England.- 1. A revolutionary situation: the first in the world.- 2. The civil war in the English way: between two parliamentary parties.- 3. The short-lived dictatorship of Oliver Cromwell.- 4. The governing parliament and the period of industrialization.- 5. The real birth of human rights and freedom of speech.- 35. The Delayed Development on the Continental Europe.- 1. The lingering Richelieu hierarchy in France.- 2. The Great French Revolution and after.- 3. Revolution passes eastward.- 4. Delayed development and its disadvantages.