tag:blogger.com,1999:blog-6837159629100463303.post7924281216031021161..comments2021-07-22T00:29:53.205-07:00Comments on Information Transfer Economics: Money defined as information mediationJason Smithhttp://www.blogger.com/profile/12680061127040420047noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-6837159629100463303.post-90998848784179111272015-05-12T20:17:55.478-07:002015-05-12T20:17:55.478-07:00Hi John,
There is an overall scale freedom in def...Hi John,<br /><br />There is an overall scale freedom in defining P (e.g. the year where P = 100). <br /><br />But also S here is not exactly RGDP -- it is widgets of aggregate supply and has units of items (10 cars, 16 toasters, 6 massages ... 10 pounds of stuff).<br /><br />For a cooler reason (from effective field theory in physics), see <a href="http://informationtransfereconomics.blogspot.com/2014/02/i-quantity-theory-and-effective-field.html" rel="nofollow">here</a>. In short, if I am defining a theory that obeys long run neutrality such that $N \rightarrow \alpha N$ and $S \rightarrow \alpha S$ stays the same, the simplest equation I can write with dynamics is:<br /><br />$$<br />\frac{dN}{dS} = k \; \frac{N}{S}<br />$$<br /><br />which stays the same under that transformation. Any $k$ is allowed there so it must be allowed in the theory.<br /><br />There is probably something even cooler involving <a href="http://en.wikipedia.org/wiki/Scaling_dimension" rel="nofollow">anomalous scaling</a> that maybe I should look into ...Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-38736036608727559892015-05-12T19:57:31.911-07:002015-05-12T19:57:31.911-07:00I've always been confused about how you have t...I've always been confused about how you have the price level <i>proportional</i> to to N/S when the definition of real GDP is nominal GDP divided by the price level. That should mean that P = N/S...John Handleyhttps://www.blogger.com/profile/16057855086740377031noreply@blogger.com