An attempt to quantify the economic system motion under the investment process incidence

Albu, Lucian-Liviu and Georgescu, George (1983): An attempt to quantify the economic system motion under the investment process incidence. Published in: Revista Economica No. 30 : pp. 23-26.

Abstract

In this paper we proposed a model deriving from physics laws, which are associated to the investments impact upon the economic system potential. Defining several physics fundamental dimensions and starting from a series of assumptions, we tried to find their possible economic meaning and interpretation. The economic growth reflected in the system potential rise under the incidence of investments, could occur on three paths (extensive, structural and intensive), depending on main factors changes: the mass of fixed capital, the resources efficiency ratio and the velocity of GDP creation. Based on the proposed model, the optimum volume and structure of investments, according both to disposable resources and targeted economic development stage, could be assessed.

• Item Type: MPRA Paper
• Language: English
• Keywords: system potential; physics laws; mechanics fundamental dimensions; economic growth; investments; fixed capital; technical progress; efficiency ratio; business cycle
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C10 - General; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E19 - Other; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General

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