Heribert Genreith

Macroeconomic Fieldtheory  (A short introduction in english. A translation of the book is still in progress.)

This book is an introduction to the field theory of economies. Why is this new economic theory so interesting and why you should study as an economist or economically interested reader this not very simple work? Let me list just the top four reasons for this:

First: For the first time the growth of gross domestic product and capital stock of the economies is explained elementary and coherent as well as theoretically exactly calculable and predictable.

Second: The difference between business and economic concepts (micro-and macro-economics) is eliminated from elementary conclusively reasons.

Third: Many since then only empirically known relationships of the economy now experience a fundamental explanation and derivation.

Fourth: As we will see, the inability of classical macroeconomics to predict financial crisis stems from the quite simple fact of just disregarding the correct balance of national economics.

The economic theories of growth experienced in the postwar period a powerful impetus to lose towards the end of the last century much attention. One reason was the fact that they never allowed significant predictions. Particularly serious was the inability to see the financial crises of recent times in advance.

Field theory is a term from physics. Field theories use mathematical calculation to describe physical effects that are caused by forces and their interactions. Also, the economy is ultimately a product whose main factors, the totality of production, the gross domestic product (GDP or Y) and the whole of the equity (capital stock or K), are in a causal relationship.

The concept of field theory may at first seem complex, but it essentially means that the fundamental principle of „nothing comes from nothing“, is considered on balance equations and their systematic treatment.

Another element of a field theory is the possibility of deriving relationships in a system from internal symmetries. As we shall see, the micro and macro- economy will be grouped together in the same fundamental building of balance equations. Brought to a crisp point, one can say from the field theoretical view: the real economy is a „spiralsymmetrically substitution economy“.

The effect of the new growth model of the economies can not be exaggerated because as it can predict the evolution and interdependence of global economies with practically usable accuracy. In particular, the quantitative effects of political and economic interventions in the financial system will be more reliable forecasted in the future. This may lead eventually to the fact that investment decisions in the financial services as well as the policy, can both be managed and communicated more risk-aware and safer.

This book is an introduction for professionals in the new macroeconomic theory which has evolved since 2009. It is still so new that it is an object of research and development and needs, as every fresh theory, further scientific work.

These started since late 2010 with the participation of the economic faculty at the University of Zug, IFZ Institute for Financial Services, Switzerland. But also I would like to invite any reader of this book for active participation. Whether in the form of possible corrections, but also wishes to supplement, or even by supplying their own contributions and insights. Because this book will experience for sure after some time an updated edition substantial contributions from guests¹ will be gladly taken against by the author.

This is quite a bit of research to do yet. This affects not only the development of the theory and its practical applications, it also affects the need for reliable statistical data of state statistical institutions. Unfortunately it is currently not the case that the economic data that you really need are easily accessible.

The institutions of the BRD² are worldwide still positive with the exception of its scope and detailed collection of high quality data. But this is the case in a surprisingly small number of countries, where often only rudimentary data are recorded or are of doubtful quality. We will use the BRD from a second reason as an example of economic growth: The BRD started in 1948 with the new Deutsche Mark from real point zero. So it demonstrates the growth of GDP and capital stock in an approximately pure manner.

This book serves not only the information and basis for researchers and students of economics, but also includes the invitation to develop this theory further. As with any new theory is much work to do, much can and must still be expanded, new ideas and determination equations added, some will have to be adjusted. So in the first edition, I ask to turn a blind eye on some odds, which may appear in case of the large scope of the work.

So well, don't hesitate to communicate such odds to me.

Heribert Genreith, Hennef, in August 2011.