ABSTRACT
One may say that plans and the realization of plans play no significant role within the static method, in the sense that the determination of the equilibrium conditions for the stationary state is achieved without any reference to plans. That is to say, it is implicitly assumed that plans and expectations are fulfilled, which is the same as saying that anticipations are not part of the data determining the ec;uilibrium. In this method plans and expectations have instead been reserved for the analysis of disturbances around the equilibrium level, like the difference between the normal rate and the money rate in the cumulative process. But this analysis is completely separate from the determination of the equilibrium level itself. 'Dynamics', even as recently as the 1920s, referred basically to a qualitative account of how disturbances might arise and work themselves out through credit cycles or trade cycles. This is very aptly shown by Cassel in his distinction between the dynamic/concrete economy and the uniformly progressive economy 9 where the former are "the deviations which actual life shows from the uniform development" (Cassel 1929, p.l9; cp. p.21, p.31). Dynamics therefore came to belong to the part of economics related to the so-called 'Theory of Money and Credit', intended as Vol.II of 'Economic Principles', while Vol.I was 'Value Theory' which analysed the determination of conditions of
"It was, I believe, first shown by Cassel that a model of steady growth can be constructed which can be handled in much the same way as the static model" (Hicks 1965, p.l3).
