Stability of a Dynamic Input-Output System

Dale Jorgenson

Chapter 20 in Readings in the Theory of Growth, 1971, pp 264-275 from Palgrave Macmillan

Abstract: Abstract Cumulative processes of inflation and changes in relative prices have been almost entirely neglected in discussions of the theory of economic growth. The neglect of relative prices may be attributed to the restriction of theoretical analysis to models involving only a single commodity, national output The neglect of inflation and deflation is a consequence of confining analysis to equilibrium situations such as Harrod-Domar1 steady growth equilibrium or the Cassell-vonNeumann evenly progressing economy.2 While a study of the behavior of an economic system in equilibrium must be part of any complete theory of economic growth, the analysis of the inter-relationship of inflation and growth requires in addition a theory of disequilibrium describing the cumulative processes of expansion and contraction, inflation and deflation, which characterize the behavior of decentralized economic systems.

Keywords: Output Level; Price System; Relative Prex; Cumulative Process; Excess Stock (search for similar items in EconPapers)
Date: 1971
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Journal Article: Stability of a Dynamic Input-Output System (1961)
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DOI: 10.1007/978-1-349-15430-2_20

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