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15 - Adjustment to a Higher Rate of Growth of Labor Supply in a Free Market. II. Force Analysis

Published online by Cambridge University Press:  07 October 2011

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Summary

In discussing stationary and dynamic equilibrium, we set forth the reasons why instrumental analysis remains incomplete unless the study of economic structures is supplemented by the determination of the behavioral and motivational patterns that support the structure in question – in a word, by force analysis. In particular it was shown that force analysis gains special importance in free market systems owing to their social organization. What then are the motorial requirements for a targeted traverse such as the one explored in the preceding chapter?

We know that market behavior must ultimately orient itself by the variations of prices and of demand and supply quantities in both the commodity and factor markets. We also know that the signals from such variations issue from the prevailing micromotivations: action directives and expectations. Therefore, our task is now to establish those price and quantity patterns and those patterns of the underlying motivational forces that are suitable to guide the system along the contorted path that raises it to a higher rate of growth.

When first taking up the motorial issues arising in a free market, we designed two behavioral models that displayed alternative processes assuring the stability of stationary equilibrium. These models, modified by what was subsequently discovered about the stability conditions of dynamic equilibrium, will play a major role in explaining the behavioral and motivational patterns required for an efficient adjustment of the system to a change in the rate of growth.

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Publisher: Cambridge University Press
Print publication year: 1976

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