Friday, September 30, 2011

Keynesian solution to everything

Good humorous story on Keynesians. Unpublished Keynesian equation discovered 

Startling Unpublished Keynes Equations Discovered

LONDON | Friday Sep 30, 2011 3:26pm EDT

(Routers) – A remarkable discovery reveals equations that economists say could end the business cycle - forever.
Ian Macallum, spokesman for the Royal & Ancient Historical Society of London, told Routers that the equations were contained in an unpublished manuscript which was found in the attic of an 18th century flat in Soho.
"We were skeptical when initially contacted by the current owners” said Macallum. “There is no record of Keynes ever having resided at that address.  But we can confirm that the manuscript is indeed an original work of Lord Keynes."
The formulas seem to have been derived from the Navier-Stokes equations which describe the motion of fluid substances.
“It’s pure Keynesian genius” said former Fed Governor Fred Mishkin.  “There is a strong consensus among economists, at least within the Federal Reserve, that liquidity is the answer to the age-old question ‘what is the meaning of life?’”   So, it makes perfect sense that someone as brilliant as Keynes would adapt these equations to a framework for fiscal and monetary policy.”
Although very technical in original form, Moody’s Chief Economist Mark Zandi said the final derivation of the equations can be simplified to the expression above.
“Unless you’re a PhD economist, I think it’s impossible to appreciate the elegance of the final derivation: by raising every stimulus factor to the power of infinity, you immediately move the probability of future recessions to zero.  It’s brilliant.  The notion that ‘risk’ is a necessary component of free market capitalism will finally be discredited.”
Federal Reserve Chairman Ben Bernanke was equally sanguine.  “I’ve asked some of my fellow academics at CERN to begin modeling the equations with an array of neutrinos, mixed with a small amount of unconventional policy.  Even without the helicopter, it should be theoretically possible to achieve an economic growth rate faster than the speed of light.  Einstein was a monetarist, so I’ve always been skeptical of his Special Theory.  It is now painfully obvious that he should have raised ‘c’ to the power of infinity, not 2.”
“I’m still trying to catch my breath!” exclaimed Nobel Prize winning economist Paul Krugman.  “Literally, when I read the equations, I felt a chill down my spine and a tingle in my balls.  We can finally end the partisan bickering and get the global economy back on track.”
(Reporting by Linda Green of Routers News)