Chapter

Introduction

GREGORY C. CHOW

in Dynamic Economics

Published in print April 1997 | ISBN: 9780195101928
Published online October 2011 | e-ISBN: 9780199855032 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780195101928.003.0001
Introduction

Show Summary Details

Preview

Dynamic economics involves explaining economic behavior that occurs through time. Although all of the economic behavior expressed by both enterprises and individuals occurs through time, there is a need to distinguish dynamic economics from other forms of economics because of how scientific theorizing entails abstraction. The term “dynamic economics” is used specifically in cases that concern long periods of development because for such cases, the time paths of various economic variables and the dynamic aspects of economic behavior are usually not taken into account. Initially, models of dynamic economics were mainly based on ad hoc assumptions and difference equations were prevalent as a tool for analysis. The development of dynamic econometric models between the 1950s and the 1970s introduced the lagged effects of variables. While optimization appears to be the fundamental goal of economics, dynamic economics involves choosing the appropriate uses for scarce resources across different periods of time.

Keywords: dynamic economics; economic behavior; time; economic variables; lagged effects

Chapter.  7660 words. 

Subjects: Financial Markets

Full text: subscription required

How to subscribe Recommend to my Librarian

Buy this work at Oxford University Press »

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.