Janet Yellen must feel like she’s herding cats. The Federal Reserve is keeping interest rates at zero, thinking the common man and woman will spend money or buy stocks. Dr. Yellen wants us all to get our risk on, continuing Dr. Bernanke’s instructions.

The central bank has quadrupled its balance sheet and can’t generate enough price inflation to make the monetary mandarins happy. (Some of us would say they haven’t looked hard enough.) The PhDs can’t figure it out. They’re getting no bang, for $4.5 trillion. All of those smart people armed with complicated models and the power of the printing press, and nothing’s happening except another Wall Street bubble. Yawn.

A couple of Fed employees toiling out in the hinterlands (St. Louis) think they have the answer. Economist Yi Wen and associate Maria A. Arias pop this question in their St. Louis Fed paper, “So why did the monetary base increase not cause a proportionate increase in either the general price level or (gross domestic product)?”

Could it be that people sensibly cut back after the crash of 2008 and are doing the wise thing—saving money—no matter what perverse incentives the central bank puts in front of them? Yes, as a matter of fact, according to Wen and Arias: “The answer lies in the private sector’s dramatic increase in their willingness to hoard money instead of spend it. Such an unprecedented increase in money demand has slowed down the velocity of money.”

It turns out the Fed heads should brush up on their praxeology… that being the study of human action, with the basic axiom, as Murray Rothbard explained, “that individual human beings act, that is, on the primordial fact that individuals engage in conscious actions toward chosen goals. This concept of action contrasts to purely reflexive, or knee-jerk, behavior, which is not directed toward goals.”

The problem is, as Rothbard points out, “Praxeology is the distinctive methodology of the Austrian school.” We can count the number of Austrian economists working at the Fed on, well, maybe no hands.

The Keynesians at the central bank think people are just so many particles that can be plugged into equations and models to determine what to set the fed funds rate at, or how much Q to stir into its QE.

Wen and Arias refer to an equation you were trying to forget from one of those economics classes you slept through:, MV=PQ. M stands for money, V for velocity, P for price level, and Q for quantity of goods and services produced.

The researchers plugged in the numbers and concluded, “(I)nflation in the U.S. should have been about 31 percent per year between 2008 and 2013, when the money supply grew at an average pace of 33 percent per year and output grew at an average pace just below 2 percent.”

Oops. Prices are rising at less than two percent the way the government (mis)counts them.

Money velocity (how many times a dollar turns over in the economy), as the graphs reflects, has plunged from over 17 times before the recession to 4.4 during the first half of 2014.

For very good reason, consumers are gloomy since the financial crisis, according to Arias and Wen, who offer as one explanation: “the dramatic decrease in interest rates that has forced investors to readjust their portfolios toward liquid money and away from interest-bearing assets such as government bonds.”

This all makes sense praxeologically. Human action is purposeful to attain goals, making a person better off. This doesn’t mean people are always right. “All that praxeology asserts is that the individual actor adopts goals and believes, whether erroneously or correctly, that he can arrive at them by the employment of certain means,” explains Rothbard.

But after a devastating financial crash, leaving millions upside down on their primary asset—their home—and with much smaller retirement accounts, it makes perfect sense that post 2008, MV=PQ might not add up. Rothbard writes:

Econometrics not only attempts to ape the natural sciences by using complex heterogeneous historical facts as if they were repeatable homogeneous laboratory facts; it also squeezes the qualitative complexity of each event into a quantitative number and then compounds the fallacy by acting as if these quantitative relations remain constant in human history. In striking contrast to the physical sciences, which rest on the empirical discovery of quantitative constants, econometrics, as Mises repeatedly emphasized, has failed to discover a single constant in human history. And given the ever-changing conditions of human will, knowledge, and values and the differences among men, it is inconceivable that econometrics can ever do so.

Of course none of this will dissuade the central bankers cum central planners from continuing their money-printing ways, and the pair in St. Louis probably haven’t done their career paths any service by having this to say about their employer’s policy:

In this regard, the unconventional monetary policy has reinforced the recession by stimulating the private sector’s money demand through pursuing an excessively low interest rate policy (i.e., the zero-interest rate policy).

Individuals act with a purpose, and they figured out that government bonds yielding zero are no better than money and are, in fact, riskier. Wen and Arias write, “the best form of risk-free liquid asset is no longer the short-term government bonds, but money.” So households are sitting on $2.15 trillion in savings—close to a 50% increase over the past five years—and banks have $2.8 trillion in reserves.

According to a Gallup poll taken in April, 62% of Americans polled said they preferred saving; 34% preferred spending. Up until the crisis, the numbers were about 50-50.

The economy isn’t an equation to solve or a machine to repair. It’s over 314 million individuals acting with a purpose. “Praxeology, as well as the sound aspects of the other social sciences,” Rothbard wrote, “rests on methodological individualism, on the fact that only individuals feel, value, think, and act,”… and if they have to, hoard money.