New Economic Theory: How Reality Surpasses Our Theoretical Models

Preface
Contents
1 Introduction
	1.1	The Question of Knowledge
	1.2	The Question of the State of Science
	1.3	The Question of Scientificity
	1.4	The Question of Research and Methodology
	1.5	The Question of Discourse—Dealing with Contrary Views in Public and in Academic Work
	1.6	The Question of Truth and Reality
	References
Part I Economic Standard Theory and the Reasons for Its Failure in the Real World
2 The Unsolved Deficits of the Classical Economic Standard Model and the Failure of the Theoretical Model in the Real World
3 Goods Market
	3.1	General Information about the Goods Market
	3.2	Factors Influencing the Goods Market
	3.3	The Supply of Goods
	3.4	The Interdependence between Production and Demand, or the “Chicken-and-Egg Problem” in Economics
4 Financial Market
	4.1	Money Market
		4.1.1	General Information about the Money Market
		4.1.2	The Money Supply in the Money Market Theory
		4.1.3	The Demand for Money in the Money Market Theory
		4.1.4	Interest Rate Control by the Central Bank
		4.1.5	The so-called Market Equilibrium in the Current Money Market Theory
		4.1.6	The Functioning of Money Markets
		4.1.7	The Nature of Money
		4.1.8	Risks of Market Participants in the Money Markets
	4.2	Capital Market
	4.3	Foreign Exchange Market
	4.4	Credit Market
	References
5 Labor or Service Market
	5.1	The Misconceptions about the Labor Market in the Current Economic Model and the Consequences
	5.2	Service Market
	References
6 The Theory of the IS-LM Curve and the IS-LM Model
	6.1	IS-Function
	6.2	LM Function
		6.2.1	The Demand for Money in the Goods Market Theory
		6.2.2	The Money Supply in the Goods Market Theory
		6.2.3	The Derived LM Function
		6.2.4	The Essential Relationships of the LM Function in Standard Theory
	6.3	The IS-LM Model
		6.3.1	Background of this Theory
		6.3.2	Conclusions from the Model
		6.3.3	Extension of the Model
		6.3.4	The Historical Development of this Model
	6.4	The Neoclassical Synthesis
		6.4.1	The Model of Neoclassical Synthesis
		6.4.2	Criticism of the Model of Neoclassical Synthesis
7 Fundamental Criticism of the Current Economic Standard Model
	7.1	The Problem of Basic Assumptions in the Current Standard Economic Model
	7.2	The Problem of Quantifiability of Factors in the Standard Economic Model
	7.3	The Problem of Aggregates in the Standard Economic Model
	7.4	The Problem of Distribution, Capital Accumulation, and Poverty in the Standard Economic Model
		7.4.1	The Principle of Poverty
		7.4.2	The Effects of Inflation
	7.5	The Problem of Resource Allocation in Reality
	7.6	The Problem of Unemployment
	7.7	General Criticism of the Standard Economic Model
	7.8	Specific Criticism of the Standard Economic Model—The Errors of Classical Economic Theory
	Reference
8 Results of the Previous Analysis
	8.1	Historical Background and Development of the Current Standard Economic Theory
	8.2	Today’s Economic Reality in the Reflexion of an Unfounded and Inapplicable Economic Theory
	8.3	How an Unfounded and Inapplicable Theory Causes Frictions and Disruptions in the Economic Reality
Part II New Economic Theory: Evolution of Economic Theory—or Socioeconomic Revolution?
9 The Holistic Universal View of the Economy
	9.1	Simple Economic Model
	9.2	Complex Economic Model
	9.3	Universal Economic Postulates
10 The Components of the Economy
	10.1	Microeconomics
	10.2	Macroeconomics
	10.3	The Economic Subjects (and the Effects of Their Behavior on the Functioning of the Economy)
	10.4	The State
	10.5	Resource Allocation vs. Resource Distribution
		10.5.1	The Problem of Optimal Resource Allocation in Economics
		10.5.2	The Problem of Optimal Distribution in Economics
11 The Real Functioning of the Economy
	11.1	Starting Point of Economic Activity
	11.2	The Role and Basic Function of Money
	11.3	Circular Characteristics of the Overall Economic Process
	11.4	Relationship between Inflation and Unemployment
	11.5	Interaction between Money and Work
	11.6	The New Labor Market Theory
	11.7	The Significance of Framework Conditions
		11.7.1	The Performance-Determining Factors of Organizational Systems
		11.7.2	The Relationship between Organizational Structure and Economic Performance using the Example of Production in East Germany and West Germany
		11.7.3	Competition of Economic and Organizational Systems
		11.7.4	Changing Organizational Structures—How Transformations Work
12 Summary of the New Economic Theory
	12.1	The New Economic Theory Reflects the Cutting Edge of Science
	12.2	The Basis of the New Economic Theory
	12.3	The Significance of the Latest Socio-Economic and Behaviorist Findings for the New Theory
	12.4	How the Microeconomic Basic Principles Determine the Macroeconomic Functions of Economic Theory
	12.5	Control Mechanisms and Control Instruments
		12.5.1	Important Connections and Interdependencies
		12.5.2	The Role and Impact of Media
		12.5.3	The Connection Between Human Behavior and System Behavior
		12.5.4	The Development and Management of Changes in a System
		12.5.5	The Development and Management of Crises
	Reference
13 Time for a Reorganization of Society
	References
Glossary
Further Reading