Geoscience Reference
In-Depth Information
5
Time in Economic Theory
˚
ke E. Andersson
Abstract
Much of spatial economic theory is based on general economic equilibrium
theory, although there are problems in a direct addition of a spatial dimension.
The most striking is the lack of an analysis of the role of non-material and
material public capital (or infrastructure) in the deduction of a static equilibrium
structure or patterns of growth and development of economies. In this paper I
demonstrate how different aspects of time can improve our understanding of
dynamics of economies.
In this paper I furthermore show that a proper refocusing on the time
dimension can also shed light on the structure of economies in space. Four
approaches are necessary for such a synthesis.
1. Subdivision of products and systems of production according to their differ-
ent and always positive durability, implying that everything produced is
capital.
2. Subdivision of products according to the time used in their production.
3. Subdivision into private and public goods, allowing for non-linearity.
4. Allowing for differences in time scales of economic processes.
With these distinctions it can be shown that the economic development in
time
and
space is determined by the impact of economies of scale, duration of
the production process, durability of products and the—relative to most other
kinds of capital—much slower growth of public capital (i.e. material and
non-material infrastructure).
