ABSTRACT
Today I will discuss some examples of the application of dynamic analyses. I will, in particular, consider closed systems displaying free oscillations. As I said in the previous lecture I think that this is the kind of analysis we must apply if we want to explain the fluctuations in the economy. For such fluctuations there are two fundamental questions. The first is the problem of the temporal pattern, i.e. how the shape of the oscillations is determined from the intrinsic structure of the oscillating system. In an economic system this structure is given by the nature of the technical production processes, by the form of the economic and social institutions, and by psychological laws obeyed by human beings. The second question is the problem of impulses. That is the problem of studying the sum of energy maintaining the oscillations.
