Economic Dynamics

Abstract

A static position is a time-less concept. The variables, indeed, may be stocks or flows, but they are all dated at the same moment or period of time, and there are no conditions imposed that relate to different points of time. In static equilibrium, we require that the variables balance out, without surplus or deficit, in some specified way, very much as the forces operating on a body at rest balance each other. The position is time-less in the sense that there are no links with the past or with the future ; we are not interested in how it got there or in what will happen to it later. So, on a particular market, demand balances supply at the price and/or income of the static equilibrium position.