The Frame of Reference for New Economic Thinking

The dialectical analysis of the essence of economic phenomena and a model developed on its basis reveal the hidden relationships between economic parameters, which cannot be detected by other methods of research. Although neoclassical theory fixes the relationship between gross saving and gross investment, nevertheless, it is not aware of the interdependence between gross saving and gross profits, also between gross investment and gross consumption in debt as well. Consequently it ignores the links between the all aforementioned macro-parameters (i.e. saving, profits, investment and consumption in debt), which exist within a closed economic system. But without all this, it is impossible to understand how the reproduction is performed, how the general equilibrium is formed, how business cycles occur. Therefore, without understanding of these processes it is not possible to create an adequate mathematical model of a decentralized economic system and develop an effective economic policy.