Axioms
The elementary production-consumption economy is given with the Starter Set which consists of axioms and definitions.
Legend: Y total income per period, W wage rate, L labor input, D dividend, N number of shares, O output, R productivity, EC consumption expenditures [C in conventional notation], P price, X quantity bought, Z placeholder, Q profit (total, monetary Qm, nonmonetary Qn), S saving. The Axiom Set relates to a period of given length.
For D=0 and N=0, the elementary production-consumption economy is represented by the 4-Quadrant graph.
The 4-Quadrant graph replaces the Supply-Demand-Equilibrium graph as standard tool of economic analysis.
4-Quadrant means that all axes are positive. This is the essential difference to Cartesian coordinates.
In the path representation of the economy (below), the seven elementary variables run through t periods. In the unit-circle representation (above) holds market-clearing X=O, budget-balancing EC=Y, and DN=0. By consequence, monetary profit is zero, i.e., Qm=0.
The path representation of the elementary production-consumption economy is open to the right side, that is, there is no such thing as an equilibrium in the evolving economy.
At first glance, it is not immediately obvious what the axioms say. This is a quite normal effect. On closer inspection, though, axioms have in most cases been found to be exceedingly useful. As a matter of fact, a consistent set of axioms is indispensable as an analytical steppingstone. Nobody can do science without clearly stated premises. This is the prime requisite. Therefore, the selection of axioms is all-important. The AXEC Axiom Set is new in theoretical economics. Every single axiom is objective and elementary — and this is exactly as it should be.
Axioms define a Paradigm. The AXEC macrofoundations fully replace the failed Walrasian microfoundations and the failed Keynesian macrofoundations.
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