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The theme of micro‐foundation of economic theory has not been adequately addressed. This is true even of those who pioneered the area of micro‐foundation of macro‐economics. The great missing link in economic theory, both of micro‐economics and macro‐economics, is the inability to methodologically integrate ethical and moral values through preference mapping. This missing methodology disables the study of institutions, policy formulation and normative statements of structural transformation. On the other hand, such issues are once again haunting the human race in the murky and troubled global relations today – from capitalism to war to governance. This paper addresses the preference mapping and embedding of ethical and moral issues as endogenous dynamics in economic theory. The approach is rigorous and methodological.

In this article we shall argue that the Keynesian revolution was a revolution in the sense of Kuhn and that Kuhn's conceptual framework provides a better understanding of the convulsive changes that took place in macro‐economics in the twenties and thirties than alternative growth of knowledge theories that are being discussed in the economics literature at the present time. In the last ten years or so economists have become increasingly interested in the various growth of knowledge theories that have been developed by philosophers of science such as Kuhn, Popper, Lakatos and others. This heightened interest on the part of economists is to be explained by the fact that these new theories are based on the actual behaviour of scientists. The new philosophers of science devote their attention not to “correct scientific method” but to the actual behaviour of scientists. It is because of this revolution in the historiography of science that economists have been able to relate these new theories to their own work and to the development of economic theories in the past.

Macro-Economics.

Undergraduate and MBA.

The COVID 19 pandemic-related restrictions devastated South Africa’s economy in 2020 and although the restrictions were generally less damaging than in 2020, the government had to budget for vaccinations and rebuild the economy. Public service unions had just announced that they were demanding an increase of 4% above inflation for their members and that they were preparing for a strike. They were bitter about the fact that the South African Government had withdrawn from the last year of a three-year wage agreement in February 2020 and their members had not received an increase for the two years. These demands and Finance Minister Mboweni’s response to them had to consider the structural and cyclical impact on the fiscus and economy.

The learning outcomes are as follows: understand the general objectives of fiscal policy and stakeholders’ interests; understand the tradeoffs in fiscal policy and the implications of taking a position; and make recommendations based on reasoned judgements about those recommendations.

Undergraduate and MBA level courses on Macro Economics.

Teaching notes are available for educators only.

CSS 10: Public Sector Management.

This note shows that much conventional macro‐economic literature uses two inconsistent definitions of equilibrium in the commodity market. Equilibrium is defined as income equalling expenditure when deriving the IS curve; but when overall equilibrium is treated the requirement for equilibrium is that planned supply equals planned demand. The note shows that these inconsistent definitions lead to a confusing and often erroneous exposition of disequilibrium behaviour.

Keynes' criticisms of Tinbergen's pioneering econometric work are traced back to Keynes' concept of “inductive probability logic”. Induction had already been rejected by Popper as the basis of scientific method. He argued that theories could be corroborated but not proved by the failure of attempts to falsify them by observation and experiment. Economic theory is proto‐theory, which is not fully falsifiable, but which yields falsifiable results if appropriate econometric methods, or a method‐theory is applied to it. A useful method‐theory needs to go beyond description and forecasting to policy optimisation.

Historically, the study of the world’s economy was classified into Micro-economics and Macro-economics. Perhaps, contemporary economists should learn from the universe which we are part of. Let us name this as “Uni-economics.” Many scientists have found that sunspots affect human behavior. Some research findings even relate the 11-year periodic cycle to war and peace of mankind. It is also widely known in the medical profession that sunspot radiation actually affects our human body. With all these evidence in mind, the purpose of this paper is to investigate how sunspot activities can affect business growth since 1960s when the global economy was building up fast since the Second World War.

The econometrics methodology deployed is in three steps. First, time series techniques were deployed to track down the changes of Sunspot Counts over the last 48 years on the world’s four main financial indices, i.e., S & P, FTSE, Nikkei and HSI. Second, the long run function of a particular stock price index could be specified as a natural logarithm transformation function. Finally, Granger’s co-integration methodology is deployed to test the equilibrium relationships.

This paper has harnessed a set of system and process that can ensure the long-term productivity and business growth of firms in this contemporary business world. It is predicted with 80 percent confidence that the next property depression in some affluent cities will happen in 2014/2015, with the global financial tsunami coming in 2019.

More important is how organizations can make use of the trade-wind and avoid the counter-wind from the Uni-economics phenomena for their quality, productivity and business growth, in accordance to the Deming Cycle. As recalled from the previous two oil crisis (around 1975, 1986) and the two financial tsunami (1997 and 2008), 40-year-old organizations that can still survive today must have done something good, despite all these turmoil confronting them.

The purpose of the paper is to report on a novel approach to assessing long‐term policy and technology impacts. This approach combines a qualitative forecast with a tri‐level quantitative projection to provide a broadly socio‐economic analysis. It is aimed at forecasting problems, such as impact assessment for future policy formulation in the light of socio‐economic, technological and market developments.

The paper is based on a variety of research methods including scenario planning, and techniques taken from analysis of stochastic processes to identify and correlate behaviour, combined with the concepts meso‐economics, in order to produce more robust tri‐level quantitative estimations, driven by qualitative analysis.

The paper finds that it is possible to join micro‐economic behaviour to macro‐economic, using meso‐economics to attack what was previously seen as a difficult gap between the two. It also finds that quantitative forecasting, based on socio‐economic behaviour using the qualitative assessment from a scenario – i.e. from stories about the future – can form a basis for quantitative forecasting. Different scenarios may be linked to corresponding quantitative economic estimations using key indicator parameters at each economic level, those which are the most relevant to the scenarios, and so exploit statistical techniques across the three levels in a balanced fashion.

This paper summarises a novel approach, taking a fresh look at forecasting economic impacts assessments by shaping the quantitative form with a qualitative tool, while introducing the linking powers of meso‐economics. General economic theories in widespread use today seem to be weak when dealing with the non‐deterministic nature of real markets and economies and especially in linking micro‐economic parameters to macro‐economic. The approach attempts to resolve this dilemma. An example is presented of its use in a recent study.

Explores how a cybernetic approach can help in comprehending problems in macro‐economics of the future for a megasystem like a large developing country, such as India. Some of the principles evolved can also be applied more generally to other countries.

The purpose of the work is to verify the offered hypothesis and to develop a new model of macro-economic balance, adapted to peculiarities of information economy.

The methodology of the research is based on equilibrium approach to studying socio-economic phenomena and processes. According to this approach, in order to determine the balance in information economy, the methods of abstracting and modeling of economic systems are used. The theoretical basis of the chapter is the classical macro-economic balance in “AD–AS” model (aggregate demand–aggregate supply model).

The research concluded that information economy envisages high specificity of the main commodity market – market of information as a product – and that behavior of sellers and buyers cannot be described correctly with the help of the classical two-dimensional model of demand and offer in macro-economics. In order to solve this problem, the author presents a new three-dimensional model of balance, which is adapted to peculiarities of information economy. This model shows that the aggregate demand and supply of information as a product in information economy depends not only on the level of market price for information but also on its value and preservation of its uniqueness. So apart from striving for lowest prices, consumers are interested in purchasing the most valuable information, which is not sold by sellers and is not available in the market. The market has only information that has no critical value for its owners and economy on the whole.

The author’s three-dimensional model of balance, adapted to peculiarities of information economy, is recommended for application.

Economic cybernetics – a very important branch of cybernetics – has elaborated and founded concepts, models, techniques and methods for the investigation both qualitatively and quantitatively of the laws of optimal balanced and proportional growth of the components of the national economy system. At the same time, economic cybernetics performs the role of a “Dialog” between Microsystems and Macrosystems, thus allowing a better understanding and management of the economic mechanism as a whole. The economic approach of economic phenomena and processes of organising and managing economic systems, of achieving the unity between micro‐ and macro‐economics is an obvious reality, confirmed by the results obtained in economic practice. The application of the methods proper to economic cybernetics, in order to find solutions to problems concerning organisation and management of the economy, the design of economic growth trajectories, the achievement of a permanent dialogue between decision and its component of the management of society, is discussed.