THE HISTORY OF ECONOMICS AND THE CONSTRUCTAL THEORY

Radu Isaic () and Cristian Paun
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Radu Isaic: University of Economic Studies, Bucharest

Romanian Economic Business Review, 2021, vol. 16, issue 2, 40-56

Abstract: The signs of a new crisis appear. Some countries are moving towards real assets (gold, oil); the real estate market froze, as did the credit market; sales are on a global decline. The world has become accustomed to economic cycles and crises. At the theoretical level, efforts are aimed at finding practical methods of prevention and especially of combating the negative effects on economic cycles. The market of theories regarding the internal causes and mechanisms of economic cycles has stabilized. The theoretical barricades were formed and strengthened and now the projectiles are thrown from one side to another. Demand theories and supply theories give partial explanations, but with claims of total theories. Is it possible to see something new at the theoretical level about the causes and mechanisms of economic cycles? We think so. We believe that the Constructal Theory of Professor Adrian Bejan has an explanatory power over the present theories about the causes of the economic cycles. The perspective offered by this theory is new and offers explanations for aspects that are difficult to understand in other theories. Through this article we want a rewriting of economic history, from the perspective and through the lens of this theory. We believe that we offer a broader and deeper explanation of the causes of economic cycles using a theoretical tool borrowed from other sciences, but with great explanatory powers in the social sciences. We will rewrite the economic history by discussing: S-evolution of economic stages; overlapping economic flow systems; systems evolving from one another; increased resource consumption and increased resource efficiency. The results of this study indicate that abusive interventions in the economic system create problems. The economic system, which is essentially a flow system, like any other system, must be allowed to evolve freely. At the theoretical level, the Austrian School and the Constructal Theory are very close. The current problems are due to the replacement of the economic natural system with an artificial one formed by the Central Banks and their regulations. The future looks even darker, cryptocurrencies include more faulty operating systems than current ones.

Keywords: flow systems; economic cycles; money; central banks; braking and acceleration systems (search for similar items in EconPapers)
Date: 2021
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Journal Article: The history of economics and the Constructal Theory (2020)
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