Conservation of Capital: Homeomorphic Mapping from Intangible Aggregate Macro-Economic CDR Space into Tangible Micro-Economic Production Spaces

Abstract

The parsimonious capitalism, democracy, rule of law (CDR) growth model is the first global time invariant cross country model. It is the first to incorporate aggregate exogenous and endogenous sources of capital into a model for converting capital to real gross domestic product adjusted for purchasing power parity. Aggregate capital is distributed to micro-economic units of production. This mapping is shown to be homeomorphic from intangible aggregate macroeconomic CDR space into tangible micro-economic production spaces, such that under certain prescribed conditions capital is conserved.

Game Theoretic Choices Between Corrupt Dictatorship Exit Emoluments and Nation-Building CDR Benefits: Is There a Nash Equilibrium?

“…F. Ramsey (1928), Solow (1956, 1957), Phelps (1961), Koopmans (1965), and Cass (1965), associated with modern growth theory based on optimal savings rate for production; Solow’s aggregate adaptation of the Cobb–Douglas production based on fixed installed capital (albeit that there can be no such thing as an aggregate production function [see Cohen & Harcourt, 2003, and A. D. Ridley & Ngnepieba, 2018, for a mathematical proof that the aggregate production cannot exist in practice]); Samuelson (1958) and Diamond (1965), associated with the overlapping generations model; Romer (1986) and Benhabib and Farmer (1994), associated with endogenous growth and consumption utility specific models.…”

General Theory of Economics: <i>CDR</i> Supply Side Scientific Growth Law Unveiled

“…Therefore, there can be no such thing as a macroeconomic function when the inputs are different types of items, or outputs are different types of items, or outputs are made by different constructs. Furthermore, there is the fallacy of composition that we can simply jump from microeconomic conceptions to an understanding of production by society as a whole (see Cohen and Harcourt [26], and see Ridley and Ngnepieba [27] for a mathematical proof). For this reason it might be that ( )…”

“…, , G f C D R = which is defined in the aggregate is a better standalone starting point for the conceptualization of aggregate G. Then, since we will already know G, we do not need an aggregate production function. However, it is assumed here that there exists a macroeconomic domain that maps homeomorphically into microeconomic domains (Ridley and Ngnepieba [27]). Still, it is only under specific conditions related to elasticities in the Cobb-Douglas function that capital will be preserved under this mapping.…”