Structural economic dynamics – definitions

The term ‘structural economic dynamics’ was, until a short time ago, practically unknown in the economic literature. Yet the phenomenon of structural dynamics is as old as the very problems of economic development themselves, to which it is intimately connected.

The evolution of modern economic systems, especially since the inception of the industrial revolution, shows that, as time goes by, the permanent changes in the absolute levels of basic macro-economic magnitudes (such as gross national product, total consumption, total investment, overall employment, etc.) are invariably associated with changes in their composition, that is, with the dynamics of their structure.

In the short run it is not always easy to see clearly a distinction between those changes that are purely transitory and reversible (as they reflect adjustments to temporary scarcities or to various accidental external shocks) and the genuine structural changes – the latter being defined as those changes in the composition that are permanent and irreversible. But in the long run, temporary deviations, in one direction or the other, cancel each other out, while the major basic trends emerge more and more distinctly as time goes on. It becomes therefore reasonable to try and discover the inter-relationships of the cumulative movements of the macro-economic magnitudes and the changes that take place within their structure.

With regard to these problems there has been a surprising lack of both awareness and attention on the part of theoretical economists.