I propose an investment-based asset pricing model augmented with intangible capital and transient volatility shock. Already-acquired intangible capital and new R&D investment are complementary inputs in knowledge production. The distinctive evolutionary dynamics of intangible capital as opposed...

One reason many college students shun economics is ineffective education. A more systematic way of explanation, with standardization and consistency, would promote learning of economic theories. This paper suggests a new framework for effective economic education. It begins with clear...

Money is neither a product nor an asset but the medium of exchange or “liquidity” as some call it. The money stock (M) can by no means affect the economy when separated from its velocity (V). Unfortunately, however, macroeconomists attach excessive meaning to “money” even though there is...

There are two global trends in production technologies: the increasing fixed costs in manufacturing and the expanding network effect in services. The first require ever-bigger market size before making break even. The second makes the first-mover invincible. As a result, a few firms will...

Korea's economic growth in the Development Era (1962~1996) was phenomenal. However, the growth was largely financed by debt capital: net capital inflow from abroad for the whole economy and bank loans for industrial firms. Overall demand for loans was so huge that various abnormal techniques,...

In popular explanations of markets, there are discrepancies to be corrected. First of all, market trade means flows and its outcome should not be determined by a stock quantity. Second, market demand is not to be defined by the opportunity cost. Third, money is merely a medium of exchange, not...

Economics might well encompass the asset market, which in turn requires completely new narratives. In addition, money may well be given the single function of the medium of exchange. Then, the defective IS-LM model can be replaced by more logical and simpler explanations: incremental money...

Most authors give, in the beginning of their elementary textbook, a warning to readers against confusion between movements on versus shifts of the demand and supply curves. Oddly, later on in the same book they themselves fall in the very trap of such confusion. The so-called Giffen good and...

Even if the IS-LM model is one of the backbones in the Keynesian economics, its explanation in textbooks has a few conceptual as well as expressional errors. Take the demand for money (Md) for example. Almost all textbook authors, including Keynes himself, explain that Md increases as the...