ABSTRACT
This chapter considers the different types of changes that need to be taken into account, and will suggest how they complicate but do not fundamentally alter the problem of adjustment already considered in the equilibrium analysis. It must be clear from the foregoing discussion that the equilibrium analysis is not restricted to static conditions. There are three types of dynamic effects that need to be taken into account in any program to reduce business fluctuations: the effects of change itself, the effects of the rate of change, and the effects of oscillating change. Similarly, in the security markets, to the extent that security prices rise temporarily above equilibrium point, the higher value of security assets and the paper windfall gains may overstimulate the demand for goods, while the subsequent collapse could damp the demand for goods. Finally, altogether it would appear that the dynamic factors complicate the execution of any policy aimed at maintaining full employment.
