Physical Macroeconomics: Part VIII - Macroeconomic Cycle

Abstract

The existence of the macroeconomic cycle in the global economy is discussed. The macroeconomic cycle was evolutionary formed under the dominant influence of the annual cycle of grain production. Thus, in the current global economy, the money supply to GDP ratio is about the same as it was in the ancient economy in which grain served as money. Therefore, the basis of the stability of the global financial system is the stability of the macroeconomic cycle in which the grain basket is an implicit currency. Because of the growing efficiency of the world economy, the useful energy component in the grain basket price already exceeded the observed price, which is flat. It is suggested in the article, that further efficiency growth is possible in the case of “phase transition” of the global economy to a new state with a revaluated grain basket and sharply increased agricultural sector. The grain in the ancient economy served as money because the total amount of grain was a measure of the working potential of the self-sufficient social system. Gold, bitcoins and other cryptocurrency can't be real money, because their total amount in a self-sufficient economy does not correspond to the working potential of the system.