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A Macroeconomic Theory of Value Conversion

Author

Listed:
  • Lee, Woongki

    (Yonsei University)

Abstract

This study develops a theory of value conversion in which conversion depends on realized consumption growth. By governing value conversion over time, consumption growth becomes a key determinant of output’s market value and a driver of broader economic expansion. The theory differs from conventional macroeconomic frameworks in two respects. First, it redefines production as an internal technological process combined with an external valuation process, so market-valued output depends not only on production but also on converting latent value into market value. Second, it reinterprets macroeconomic relations by treating household consumption as the starting point of causality.

Suggested Citation

  • Lee, Woongki, 2026. "A Macroeconomic Theory of Value Conversion," SocArXiv 4nq58_v1, Center for Open Science.
    • Handle: RePEc:osf:socarx:4nq58_v1
    DOI: 10.31235/osf.io/4nq58_v1
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    References listed on IDEAS

    as
    1. Breeden, Douglas T., 1979. "An intertemporal asset pricing model with stochastic consumption and investment opportunities," Journal of Financial Economics, Elsevier, vol. 7(3), pages 265-296, September.
    2. Herbert A. Simon & Ferdinand K. Levy, 1963. "A Note on the Cobb-Douglas Function," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 30(2), pages 93-94.
    3. Shaikh, Anwar, 1974. "Laws of Production and Laws of Algebra: The Humbug Production Function," The Review of Economics and Statistics, MIT Press, vol. 56(1), pages 115-120, February.
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