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Regional Science Matters pp 55–70Cite as

Time in Economic Theory

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Abstract

Much of spatial economic theory is based on general economic equilibrium theory, although there are problems in a direct addition of a spatial dimension. The most striking is the lack of an analysis of the role of non-material and material public capital (or infrastructure) in the deduction of a static equilibrium structure or patterns of growth and development of economies. In this paper I demonstrate how different aspects of time can improve our understanding of dynamics of economies.

In this paper I furthermore show that a proper refocusing on the time dimension can also shed light on the structure of economies in space. Four approaches are necessary for such a synthesis.

  1. 1.

    Subdivision of products and systems of production according to their different and always positive durability, implying that everything produced is capital.

  2. 2.

    Subdivision of products according to the time used in their production.

  3. 3.

    Subdivision into private and public goods, allowing for non-linearity.

  4. 4.

    Allowing for differences in time scales of economic processes.

With these distinctions it can be shown that the economic development in time and space is determined by the impact of economies of scale, duration of the production process, durability of products and the—relative to most other kinds of capital—much slower growth of public capital (i.e. material and non-material infrastructure).

This technical paper is closely related to my popular and thus non-technical paper published as Andersson Å.E. (2013) Time, space and capital. In: Andersson DE (ed) Advances in Austrian economics—the spatial market process. Emerald, Bingley

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Notes

  1. 1.

    If we assume indivisible units of machines and humans and that the productivity of a machine or a human (x(i)) depends on interaction with (x(j)) and if these interaction net benefits can be captured by the quadratic form x’Cx, then there is no simple incentive mechanism or computerized search algorithm that would provide the route to a global maximum for most interaction matrices C (Koopmans and Beckmann 1959).

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Authors and Affiliations

  1. Department of Economics, Finance and Statistics, Jönköping International Business School, Sandgatan 31, 311 34, Falkenberg, Sweden

    Åke E. Andersson

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  1. Åke E. Andersson
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Correspondence to Åke E. Andersson .

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Editors and Affiliations

  1. Department of Spatial Economics, VU University, Amsterdam, The Netherlands

    Peter Nijkamp

  2. University of Southern California Price School of Public Policy, Los Angeles, California, USA

    Adam Rose

  3. VU University Department of Spatial Economics, Amsterdam, The Netherlands

    Karima Kourtit

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Andersson, Å.E. (2015). Time in Economic Theory. In: Nijkamp, P., Rose, A., Kourtit, K. (eds) Regional Science Matters. Springer, Cham. https://doi.org/10.1007/978-3-319-07305-7_5

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