General Theory of Economics: CDR Supply Side Scientific Growth Law Unveiled - Theoretical Economics Letters

TEL > Vol.8 No.15, December 2018

General Theory of Economics: CDR Supply Side Scientific Growth Law Unveiled ()

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Download as PDF (Size: 2117KB) PP. 3637-3663

DOI: 10.4236/tel.2018.815223 683 Downloads 1,932 Views Citations

Author(s)

Dennis Ridley^1,2

Affiliation(s)

¹School of Business & Industry, Florida A & M University, Tallahassee, FL, USA.
²Department of Scientific Computing, Florida State University, Tallahassee, FL, USA.

ABSTRACT

The capitalism (C), democracy (D) and rule of law (R)—CDR global invariant hypothesis was previously demonstrated for year 2014 cross country per capita real gross domestic product adjusted for purchasing power parity (G). Consistent with the principle of parsimony, the CDR index explained G with only these three variables. This paper re-estimates the model for the last 22 years of available data. The result is model parameters that are a set of global time invariant constants. These constants constitute the global time invariant CDR index defined by the vector inner (dot) product of the global constants and country C, D, R and C·D·R. This establishes the CDR global time invariant hypothesis. Exogenous and endogenous components of capital are decoupled to calculate and explain the values and roles of new ideas versus old capital stock. Based on the unitary entrepreneurship elasticity of G, the theoretical optimal reinvestment in capital stock is validated by empirical gross fixed capital formation. Together, these place economic growth on a scientific basis. Because of the absence of explicit definitions in the extant literature for concepts such as capitalist, capitalism, entrepreneurship and other consequential terminologies, they are clarified in concise nomenclature.

KEYWORDS

CDRIndex, GDP, Capitalism, Democracy, Rule of Law, Entrepreneurship

Share and Cite:

Ridley, D. (2018) General Theory of Economics: CDR Supply Side Scientific Growth Law Unveiled. Theoretical Economics Letters, 8, 3637-3663. doi: 10.4236/tel.2018.815223.

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