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However, I have shown above that this impossibility can be resolved if the
dynamic models of the economy contain proper distinctions between the time
scales of markets for goods, and the slow changes of the infrastructural stage on
which the markets operate.
Conclusions
The theories and observations of the role of different time dimensions are
fundamental to our understanding of economic processes in time and space.
The most important time dimensions in dynamic and spatial economic theory
are:
Duration of production
.
Durability of goods
and the inverse—the rate of depreciation.
Differences in time scales between infrastructure and market goods.
The choice of duration of a production process is important both for the
temporal and spatial structure of production. With the increasing importance of
large costs of scientific and industrial research and technological development
this issue has become increasingly important.
But duration of the production process must be complemented by the dura-
bility of the goods produced. All goods are durable although to different
degree—and all goods are consequently capital—and durability of capital is
thus an irreducable determinant of many aspects of the economy as a growing
spatial system.
The durability of goods and duration of production processes contribute in
determining capital-output ratios, optimum rates of interest and growth and the
spatial extent and pattern of the competitive markets.
The extreme durability and public nature of institutions, knowledge, networks
and other infrastructure provides the basis of a new theory of complex dynamic
spatial economic system. Within such an evolving system a general equilibrium
of prices can exist and be stable.
References
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˚
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Andersson
˚
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on capital and interest was first published as appendixes to volume 2 of the 1909-1912 edition,
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Br´dy A (1970) Proportions, prices and planning. North Holland, Amsterdam
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