An attempt to quantify the economic system motion under the investment process incidence

Lucian Albu () and George Georgescu

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we proposed a model deriving from physics laws, which are associated to the investments impact upon the economic system potential. Defining several physics fundamental dimensions and starting from a series of assumptions, we tried to find their possible economic meaning and interpretation. The economic growth reflected in the system potential rise under the incidence of investments, could occur on three paths (extensive, structural and intensive), depending on main factors changes: the mass of fixed capital, the resources efficiency ratio and the velocity of GDP creation. Based on the proposed model, the optimum volume and structure of investments, according both to disposable resources and targeted economic development stage, could be assessed.

Keywords: system potential; physics laws; mechanics fundamental dimensions; economic growth; investments; fixed capital; technical progress; efficiency ratio; business cycle (search for similar items in EconPapers)
JEL-codes: C10 E19 O11 O40 O47 (search for similar items in EconPapers)
Date: 1983-06
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:14234

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