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      12-16-2011, 06:27 PM   #11

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I think I've somewhat gleaned what you're trying to say, and generally don't disagree. I posted the Keynsian vs. Austrian model to illustrate the time preference and interest rates which Keynes ignores. The FED is represented in interest rates (i), and bubbles have been indicated to be unpredictable (other than the fact they will occur) and unavoidable in speculative markets by experimental economic research.

By represented as "inorganic" structures, I believe the term I learned your looking for is many people use static representations which are impossible for an economic system which is a complex-dynamic system. It's not like (excuse the potentially crude example) adding 2 hydrogens to oxygen, where you'll get H2O or water every time. How the system reacts to the same stimulus at a different point in time is dependent on what has happened before it, along with prevailing interest rates and time preference.

Many noted Austrian economists (and I'm not a de facto Austrian or neo-classical subscriber) acknowledge that static models are far from perfect, but insist that the idea that one shouldn't seek a more accurate theory, or explanation, or model, is a form of logical error known as perfect-solution fallacy, which is the argument that since the proposed solution is not perfect, it should be rejected completely instead of acknowledging that it may not be perfect, but it is better than what we had (a pareto improvement of sorts).