The core principle is that endogenous money dynamics in behavioral finance are governed by dimensional analysis and flow table modeling, distinguishing between monetary stocks (loans) and flows (wages/profits) to correct static equilibrium errors. The theory posits that sustainable economic activity arises when the velocity of capital turnover—defined as the reciprocal of the production cycle duration from initial investment ($M$) to realized surplus ($M'$)—generates incomes sufficient to cover interest payments without requiring perpetual debt expansion. This framework belongs to financial dynamics and econophysics, relating to classical political economy by integrating Marxian concepts of circulation stages (production and realization) with thermodynamic analogies regarding entropy production in complex economic systems.
The core principle is that endogenous money dynamics in behavioral finance are governed by dimensional analysis and flow table modeling, distinguishing between monetary stocks (loans) and flows (wage…