When people who are fat and flabby begin to get in shape by lifting weights, they are often surprised to discover that, although they lose inches off their waistline, they don’t actually weigh any less. This is because muscle is much denser than fat, and an amount of muscle takes up about one-third the space as the same amount of fat. The change in a person’s shape is a qualitative one rather than a quantitative one, and such changes will often have a bigger result on how he looks and feels than simply losing weight while maintaining the same fat-to-muscle ratio.
Although Paul Krugman and a few other mainstream economists are finally beginning to admit that the U.S. economy is not only in a depression, but has been in a depression for some time now, their neo-Keynesian models, which are entirely quantitative, still do not permit them to understand how or why that is the case. With their singular focus on gross domestic product, or GDP, they completely fail to even try to understand how qualitative changes in outstanding credit market debt have a significant effect on the economy.