Dynamic Value As Capital - What's Missing From MacroEconomics, And GDP Too

   (Commentary posted by Roger Erickson.)



If any economist wants to hear a description of what's missing from macroeconomics, here's a great example.

Achieving Greatness by Giving Control and Creating Leaders

... the concept of leadership [and group agility, AND policy agility, as real capital] is certainly more complicated than taking and receiving orders. As retired U.S. Navy Captain David Marquet explains in the following video, it’s about creating an environment that empowers the members of an organization to think creatively and take psychological ownership of the mission at hand, whatever it may be. [And, providing them with adequate venues to practice exactly that.]
It’s about “giving control and creating leaders, not taking control and attracting followers,”

Put that in your ISLM and, instead of smoking it, just blow it up? And toss ISLM in the garbage?

What's missing from GDP? It tracks only static assets. Not dynamic assets. As Steve Hansen points out, GDP became increasingly less useful as we transitioned further from a product to more of a service economy.

Leadership?  

Leadership, leadership everywhere, but nary a drop applied to enlarging our policy space. Or to increasing our policy agility.

  Rhyme of the Ancient Marriner Eccles