The Economy in its house. 2022 edition

Marcel Aucoin

Description

The title ― The Economy in its House ― echoes Xenophon’s book, Œconomicus, which focuses on
the relationship of a house with its environment rather than on trade. It also makes reference
to a question from Socrates: "What is a house?". It is by striving to explore these
relationships and questions, reflecting the conditions of our time, that we have concluded
that the economy is in its house ― and that changes everything. Indeed, this leads us to establish
a foundation ― new but grafted onto ancient roots ― for economics.
By integrating into our theory the unpredictable environment, we provide economists with
a framework to address the multiple issues that arise not only in our common home, the Earth,
but also to all other houses. Our model is based on the hypothesis of the random nature of
the economy, which brings us closer to modern physics and its methods.
On these pillars, our model abstracts economic agents and focuses attention on the interconnected
constituents of the house, both their mutual statistical relationships, and those they have with
the environment. The covariance matrix that retraces such relationships indicates how the environment
disrupts, on average, each constituent during a period. This gives the possibility to explore
the destinies of the houses in the short, middle or long run, through crises and changing
perspectives of ruin. It makes it possible to identify three essential variables: the growth
factor, the growth energy, and finally the prices’ root, which is also the weight of the unit
of account and an anti-ruin coefficient.
One of the characteristics of modern houses is that, among their constituents, positive
covariances outweigh negative covariances. Hence their growth: we explore its links with
the reduction of inequalities, and its pathologies: pollution and depletion of resources.
We shows how we can fight against crises and inequalities through greater solidarity.
We show that one can model any house by use of a miniature house ― its soul ― with two components
(the hearth and the roof), and three guiding parameters: exposure to hazards, security,
and performance. With these guides, one expresses all the macroeconomic variables relative
to a house. These are preserved by passing from a house ― whatever its importance ― to its soul.
The wealth of the results obtained shows that the path open must allow economists to go farther
and safer in their work while also enabling a broader public to better understand what the economy is.

Sujets

• Sciences économiques

Informations

• Publié par: Iggybook
• Date de parution: 26 juin 2023
• Nombre de lectures: 0
• EAN13: 9782379799570
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

To the reader

You are sovereign in exploring this e-book; you will always have access to this opening page. Thanks to the general Index, you will be able to navigate through the book by searching for the words or expressions of your choice using: Command F on Mac OS, Ctrl F on Windows or depending on your operating system .
To navigate through the book, you can use the commands specific to your operating system (Windows, MacOS, Linux, etc.) and your keyboard. For example in Windows:
• Scroll down the pages: down arrow
• Scroll up the pages: up arrow
• To go forward one page: right arrow
• To go back one page: left arrow
• To return to the beginning of the book: start key or
• To go to the end of the book: end key
Your field of observation will expand greatly with the ability to click on the page numbers of the articles that interests you. Let’s do a test. First and foremost, note how to return to this page, or how to return to the previous view. You can start by clicking on the word Summary , which takes you to the Executive Summary, where you can read presentations of the four parts of the volume and summaries of its 13 chapters. Then, as shown above, use “ Fn (or Alt ) + left arrow ” to return To the reader page.
For a more methodical approach, you can begin by reading the book’s summary , then go on to the Introduction – the first 14 pages. After having meditated, you will be able to explore the following pages (14 to 24) – a little more complicated but essential – by clicking on Building a house model for our time . In the next sections, you will be able to grasp key generalities on The model of the house , up to Mathematical and physical aspects of the model ; these sections are perhaps less ‘comfortable’ to read, but still accessible.
After a period of rest, the rest of the Introduction, devoted to the Teachings of the Model , can be tackled. Other resources are also available, such as the Glossary Index , and tools that make it possible to penetrate deeper into the book: Index , Index of proper names , Bibliography .
For readers inclined towards an examination of the methods used, we recommend starting with The model of the house and Mathematical and physical aspects of the model . Then one could consult the Note and the Indexes: Mathematical tools used and methods borrowed from Physics , as well as the List of tables and figures .
Finally, it is recommended to take in the knowledge offered in the Teachings of the Model . For economists, it will be useful to read House theory and economic theories . Finally, the Life of houses , which closes the Introduction, will interest everyone.
To understand the origin of the book, you can also consult the Preface and Foreword by the author.
This e-book is the «royal way» to penetrate – by the paths of your choosing – more deeply into what that volume can teach you; and even, if you prefer, without ever bumping into mathematical equations. Now that you have mastered the key navigation tools, we invite you to enjoy your journey!
Marcel Aucoin


Marcel AUCOIN

The economy in its house

A new foundation for economics


Summary

List of tables and figures XIII
Preface by Jacques de Larosière XV
Preface by Marcel Aucoin XIX
Foreword XXIII
Introduction 1
Note 53
Part 1 • Foundations
Chapter 1 Mathematical Notions 57
1.1. Covariance matrices: generalities and definitions 58
1.2. Covariance matrices: properties 60
1.3. Complements on covariance matrices 62
1.4. Perron vector and Perron-Frobenius theorem 65
1.5. Generalized Perron vector 67
1.6. Fundamental pair of a covariance matrix 68
1.7. Fundamental eigenvalue and smallest marginal variance 72
1.8. Summary 73
Chapter 2 A Stochastic Model of a House 75
2.1. Constituents of a house 75
2.2. House, stochastic process 80
2.3. House, entity of value 87
2.4. Summary 95
Chapter 3 The Hearth and Roof of the House 99
3.1. Partitioning constituents: the hearth and the roof of a house 100
3.2. Clarification of the distinction between the hearth and the roof of the house 108
3.3. The articulation of the house and the economy 111
3.4. People, goods, and intangible products 120
3.5. Summary 124
Part 2 • House Activity
Chapter 4 The Activity of a House During a Period 129
4.1. Growth energy 130
4.2. Economic mass, inertia, and impulse 136
4.3. The Growth factor 139
4.4. Growth and investment 141
4.5. General production and consumption 146
4.6. Relations with physics 149
4.7. Summary 150
Chapter 5 States, Equilibria, Impulses and Prices 153
5.1. State of a house and boundaries conditions 154
5.2. Probability flow, conservation principles 157
5.3. Search for a state of ideal equilibrium 164
5.4. Preliminaries in search of a structural equilibrium 166
5.5. Summary 169
Chapter 6 Uncertainty Relation and Current Regulation of a House 171
6.1. Uncertainty relation between position and current prices 172
6.2. Form of state ρ ( x , t ) 178
6.3. Possibility of a time-dependent structural house equilibrium 181
6.4. Existence of the market 183
6.5. Mathematical expectation of current wealth 184
6.6. Summary 185
Part 3 • Ruin, Crisis; Inequality and Growth
Chapter 7 The ruin in principle 189
7.1. Ruin probability in one-dimensional process 191
7.2. Probability of ruin of a house ( general case: several dimensions ) 195
7.3. Units of account; wealth and fortune 197
7.4. Reality of ruin 207
7.5. Autonomy and probability of ruin 208
7.6. Summary 209
Chapter 8 What is a crisis? 211
8.1. Operation of a house: regular mode and critical mode 213
8.2. Dual significance of general production and consumption 218
8.3. The vital circuit of a house 220
8.4. Deduction of probability of crisis 224
8.5. Crisis: sign of a shortage of place in the house 228
8.6. Crises and depressions 229
8.7. Summary 230
Chapter 9 Wealth and Precariousness in a World of Solidarity 233
9.1. State and boundary conditions in the one-dimensional case 234
9.2. Probability conservation 236
9.3. Ease equilibrium 239
9.4. Conditions and cause of primary inequalities 244
9.5. Summary 250
Chapter 10 House Growth 253
10.1. Growth energy and anti-crisis energy 254
10.2. The notion of precariousness 256
10.3. Determining growth 260
10.4. External and internal solidarity 261
10.5. Manna and frugality 262
10.6. Classification of model variables 263
10.7. Summary 265
Part 4 • Synthesis of a House: its essence
Chapter 11 The essence of a House 269
11.1. Reminders 269
11.2. A House in miniature 272
11.3. The essence of a house 283
11.4. The essence, also quintessence of the house 290
11.5. Plasticity of a house 295
11.6. The Cohort of a house 295
11.7. Summary 298
Chapter 12 Cooperation and Antagonism: Hearth and Roof 301
12.1. Growth 302
12.2. Prices’root depending on guiding parameters 314
12.3. The house territory 319
12.4. Recapitulation of the influence of guiding parameters 320
12.5. Clarification of the role of exposure 321
12.6. Growth energy and physical energy 323
12.7. Summary 323
Chapter 13 The Life of Houses 327
13.1. Houses: past and modern 328
13.2. Modern societies: growth societies 331
13.3. Jump or shift in the cold 333
13.4. Decline or rather new growth 335
13.5. Hazards and the construction of a house 337
13.6. As a conclusion 340
13.7. Summary 343
Glossary Index 345
Glossary 347
Bibliography 377
Index 385
Mathematical tools used and methods borrowed from Physics 405
Index of proper names 411


List of tables and figures

Table 1 • Reducible Matrix 66
Table 2 • Natural cohesion matrix partitioned by blocks: hearth and roof 102
Table 3 • Cohesion Matrix: Canonical Form 104
Table 4 • Meanings of the fundamental eigenvector and its derivatives 204
Table 5 • “Mass” family variables 263
Table 6 • Mixed Variables 264
Table 7 • Variables depending on values 265
Table 8 • Canonical form of the cohesion matrix 271
Table 9 • Miniature House Ã* 272
Table 10 • Matrix (Ã*) of a miniature house in natural mode 272
Table 11 • Canonical matrix of a miniature house 273
Table 12 • Miniature house correlation matrix 273
Table 13 • Raw exposure matrix of the miniature house 273
Table 14 • Matrix of the marginal standard deviations of the miniature house 275
Table 15 • Miniature house depending on basic parameters 275
Table 16 • Matrix of a miniature house in natural mode 278
Table 17 • Matrix D 280
Table 18 • Matrix C 281
Table 19 • Canonical form of the cohesion matrix 284
Table 20 • Generation matrix of the Essence of a house 284
Table 21 • Essence of a house conformal to the cohesion matrix 285
Table 22 • Preserved variables of the “mass” and mixed families 291
Table 23 • Diagonal 2×2 matrix K by blocks) 291
Table 24 • Generation matrix of the essence of a house 292
Table 25 • 2×2 diagonal matrix J 292
Table 26 • Generation matrix of the house’s essence 296
Table 27 • Aggregation matrix from A to B 296
Table 28 • Generation matrix of the essence of an aggregate matrix 297
Table 29 • Recapitulation of the influences of the guiding parameters on the variables of the model of the house 320
Table 30 • Dependency of the activity of a house to its exposure 322

Figure 1 • Autonomy Depending of Probability of Ruin 208
Figure 2 • General form of the equi