The impact of science on economic growth and its cycles. The mathematical dynamics determined by the basic macroeconomic facts (Q1271324)

In mathematical natural sciences, such as physics and chemistry, theoretical development has been largely determined by observed facts, the world of observations uniquely determines the theoretical system. Therefore the fundamental changes in those sciences usually were generalizations like in physics from Newton to Einstein and to quantum theory. In economics the situation is a little different, new fundamental ideas have come slowly in economics, the fundamental changes often are not generalizations but rather abrupt replacement of basic ideas. The author proves that the Einstein principle also works in macroeconomics. Economic development must be seen in a wider context of human development in which the accumulation of exact scientific knowledge plays a central role. For that reason he introduces a new mathematical element to economic theory and the macroeconomic dynamics with a generalized value function is constructed and empirically verified. The macroeconomic value function is generalized by adding a leisure term with an unbounded value function to the usual consumption term. Such a leisure term can be interpreted to represent the inexhaustible value of individual freedom, which has economic relevance by creating favorable conditions for cognitive and other innovations. The constructed macroeconomic dynamics is used for the explanation of the basic macroeconomic facts concerning average growth, irregular growth variations, quantitative regularities of growth cycles, anomalities of growth and growth cycles.