Saturday, October 01, 2011
Keynes's Fluid Mechanics Equation
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spokesman for the Royal & Ancient Historical Society of London, told Routers that the equations were contained in an unpublished manuscript which was found in the attic of an 18th century flat in Soho. The subject was liquidity and turbulence, with formulas derived from the Navier-Stokes equations which describe the motion of fluids.
“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.”
“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. It ends Greenspan's Age of Turbulence.”