2 Introduction

The economic theories of growth experienced in the postwar period a powerful impetus to lose towards the end of the last century much attention. One reason was the fact that classical mathematical growth theory never allowed significant exact predictions. Particularly serious was the inability to see the lot of recent financial crises in advance.

This book is an introduction to the field theory of economies. Field theory is a term from physics. Field theories use mathematical calculation to describe physical effects that are caused by forces and their interactions. Although, or perhaps because, theoretical physics is the mathematically most sophisticated science, it is also the oldest of all the mathematical sciences⁵. The first field theory was found by Isaac Newton (1643-1726) who discovered the theory of classical gravitation and mechanics. The second important field theory was the theory of electrodynamics which was developed by James Clerk Maxwell (1831-1879) first. We also have to mention the thermodynamics, which was only in the last century largely completed, and of course the theory of relativity by Albert Einstein (SRT 1905/ ART 1915) and quantum mechanics (1925) from which followed the Standard Model of Elementary Particles (1973). All this fundamental theories are sources of modern wealth as they are the indispensable conditions for technical inventions and improvements. One need not wonder that the population explosion on the planet earth began at exactly the times, when Newton was to find the first of the field theories.

One of the most fundamental discoveries in this regard was made by a young woman. Their discovery was so very mathematical in nature, that it has in the minds of many scientists still not found the necessary input. It was Emmy Noether (1882-1935), which found between all these laws of nature so important a great connection. Named after her is Noether's theorem (1918) which gives the connection between symmetries of physical laws of nature and conservation values. Her theorem was the culmination of a fundamental principle, which already by Leonhard Euler (1701-1783) and Joseph-Louis Lagrange (1736 - 1813), however, was found in less general context. Noether's theorem may therefore well be now referred to as the "mother of all theories."

Also, the economy is ultimately a technical product whose main factors, the totality of production, the gross domestic product (GDP or Y) and the whole of the equity (financial capital stock or K), are in a causal relationship. The concept of field theory may at first seem complex, but it essentially means that the fundamental principle of „nothing comes from nothing“, is considered on balance equations and their systematic treatment. Another element of a field theory is the possibility of deriving relationships in a system from internal symmetries. As we shall see, the micro and macro- economy will be grouped together in the same fundamental building of balance equations. Brought to a crisp point, one can say from the field theoretical view: the real economy is a „spiral-symmetrical substitutional economy“.

The effect of the new growth model of the economies can not be exaggerated because as it can predict the evolution and interdependence of global economies with practically usable accuracy. In particular, the quantitative effects of political and economic interventions in the financial system will be more reliable forecasted in the future. This may lead eventually to the fact that investment decisions in the financial services as well as the policy, can both be managed and communicated more risk-aware and safer.

This book is an introduction for professionals in the new macroeconomic theory which has evolved since 2009. It is still so new that it is an object of research and development and needs, as every fresh theory, further scientific work. These started since late 2010 with the participation of the economic faculty at the University of Zug, IFZ Institute for Financial Services, Switzerland. But also I would like to invite any reader of this book for active participation. Whether in the form of possible corrections, but also wishes to supplement, or even by supplying their own contributions and insights. Because this book will experience for sure after some time an updated edition, substantial contributions from readers will be gladly taken against by the author.

There is quite a bit of research to do yet. This affects not only the development of the theory and its practical applications, it also affects the need for reliable statistical data of state statistical institutions. Unfortunately it is currently not the case that the economic data that you really need are easily accessible. The institutions of the Federal republic of Germany (FRG) are worldwide still positive with the exception of its scope and detailed collection of high quality data. But this is the case in a surprisingly small number of countries, where often only rudimentary data are recorded or are of doubtful quality. We will use the FRG (or BRD for Bundesrepublik Deutschland) from a second reason as an example of economic growth: The FRG started in 1948 with the new Deutsche Mark from a real point zero. So it can demonstrates the growth of GDP and capital stock in an approximately pure manner.

This book serves not only the information and basis for researchers and students of economics, but also includes the invitation to develop this theory further. As with any new theory is much work to do, much can and must still be expanded, new ideas and determination equations added, some will have to be adjusted. So in the first edition, I ask to turn a blind eye on some odds, which may appear in case of the large scope of the work.

So well, don't hesitate to communicate such odds to me.

Some Hints for Using this Book

There are basically two ways to make such an introduction. Either one starts with the most basic or with the most obvious. From a teachers point of view starting with the most fundamental relationships is in general better, since proofs of the special theory follow naturally from the general theory. But it would not be as useful because of the generally little-known and mathematically complex methodology of the calculus of variations and the Euler-Lagrange equations in the classical economy. But anyone who knows about it already, can also start reading from the second part of the book.

For other readers the book gradually develops the special linear theory and then in the second part is offered a general introduction to the full self-consistent nonlinear theory.