In the first section of Chapter IX, the author, Sir John Hicks, introduces the subject of economic dynamics. He describes it as being those parts of economic theory in which every quantity must be time-stamped. (He actually uses the term "dated" but the concept of something's being time-stamped is probably fairly familiar to us in this age of e-commerce transactions.) Up to now, the book has been concerned with "economic statics." So in thinking about quantities of commodities consumed, or quantities of factors used to produce quantities of products, the discussion hasn't addressed questions as to when the consumption happens, or when the factors are available, or when the products will be finished. In economic dynamics, we do address such questions.
Hicks goes on to explain that his rule of having abstained from looking at time-stamping ("dating") of quantities will have "great advantages" as he proceeds to examine the theory of economic dynamics. This is because the methods of analysis he used in developing his static theory will be useful in analyzing dynamic problems. He concludes this section as follows:
It is not obvious that anything like the same methods will do. Nevertheless, we shall find, as we proceed, that there is a way of reducing the dynamic problem into terms where it becomes formally identical with that of statics. Thus the results of static theory can be used after all; though almost all of them need drastic reinterpretation.
No comments:
Post a Comment