Long-Run Equilibrium, Adjustment Time, and Economic Conservation Laws

Ryuzo Sato, Takayuki Yamashita () and Tamaki Morita ()
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Ryuzo Sato: New York University, C.V. Starr Professor Emeritus of Economics
Takayuki Yamashita: Aoyama Gakuin University, School of Global Studies and Collaboration
Tamaki Morita: J. F. Oberlin University, Faculty of Aviation Management

Chapter Chapter 8 in On the Structural Transformation of the Japanese Economy 1985-2023, 2026, pp 183-211 from Springer

Abstract: Abstract This chapter deals with the log-run macroeconomic equilibrium, adjustment time, and economic conservation laws. The original version of this chapter was a lecture (in Japanese) entitled “Dynamic analysis and the role of subjective time” by Sato on June 28, 2014. It was presented at the Sato Workshop, held at the Komaba Campus of the University of Tokyo. The current version is based on the works expanded by Sato, Yamashita, and Morita. The primary purpose is to provide a reasonable justification for the analysis of the trend of the Japanese bubble economy. The concept of “subjective time and subjective discount rate” is a useful device for explaining the timeTime horizon during the period. The concept of the subjective time may be defined as a Lie Group transformation from the objective time. The model starts from the long-run trends of the U.S. and Japanese economies. For the U.S. economy, the usual and traditional “conservation laws” are valuable tools for confirming balanced growth trends. However, for the Japanese economy, subjective time preference is more useful for justifying the long-run trend of the economy.

Keywords: Adjustment time; Discount rates; Economic conservation laws; Income-wealth ratio; Optimal growth; Subjective time (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1007/978-981-95-7230-4_8

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