Analytic procedures

We are now ready for an investigation of the movements of the flows through time.

The analytic procedure which will be followed is first to formulate some specific basic hypotheses regarding the course over time of those magnitudes that are exogenously accepted from outside our analysis (population, technical knowledge, patterns of consumption); then to proceed to a search for those conditions that must be kept satisfied in order that there exist meaningful solutions for the magnitudes which are the object of our economic investigation; and finally to go on to examine the equilibrium paths of such solutions as time goes by.

We must first establish a preliminary analytic convention regarding the notion of time. There are two alternative procedures which may be followed here. Time may be considered as a succession of finite periods, thereby making the supposition that the changes occur between one period and another; or time may be considered as giving way to continuous variations, which means that the single periods become so short as to be infinitesimal. For most of our analysis, it is not important which one of these two conventions is adopted. But since the second one makes formulations analytically simpler, this is the one which will normally be followed, except that, from time to time, the arguments may be recast in terms of the first convention, whenever that appears useful or appropriate.

However, we shall not venture immediately into the complex realm of structural change.