Amends of an old feud (Goodwin’s flair for the law of conservation)

Bródy, A. and Ábel, I. (2010) Amends of an old feud (Goodwin’s flair for the law of conservation). Acta Oeconomica, 60 (2). pp. 127-141. ISSN 0001-6373

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Abstract

Mathematical duality in economic dynamics offers a fresh insight for applied research. The dichotomy of causes and objectives is fading away in economics just like it disappeared from physics over the past century. The struggle between apparently conflicting theories gives way to practical approaches of empirical assessment of economic motion. We present an approach based on the Goodwin model which offers a clear exposition and deeper insight by using the mathematical concept of the ‘first integral’. Goodwin’s classic model of the economic cycle stands on the dividing line between the teleological and the causal school of thought and is theoretically acceptable to both. Inputs and outputs, aims and means, causes and objectives are organically interconnected in his approach that also provides a computationally simple alternative to facilitate the numerical and graphical description of economic cycles.

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