Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/18/84; site dciem.UUCP Path: utzoo!dciem!mmt From: mmt@dciem.UUCP (Martin Taylor) Newsgroups: net.politics.theory Subject: Re: Business Cycles -- Note to Gadfly:Re to DKmcK Message-ID: <1550@dciem.UUCP> Date: Mon, 20-May-85 18:51:06 EDT Article-I.D.: dciem.1550 Posted: Mon May 20 18:51:06 1985 Date-Received: Mon, 20-May-85 19:33:46 EDT References: <1146@ratex.UUCP> <632@whuxl.UUCP> Reply-To: mmt@dciem.UUCP (Martin Taylor) Organization: D.C.I.E.M., Toronto, Canada Lines: 34 Summary: >>In order for there to be *no* economic cycles whatsoever the >>system would have to be *constantly* at the exact equilibrium point. > >This is complete, utter, total, absolute bullshit. A system oscillates >if it is underdamped; if it is overdamped (or critically damped) it >moves towards equilibrium asymptotically; under no circumstances >does it sit constantly at the equilibrium. >> tim sevener whuxl!orb >--JoSH JoSH's first quoted line applies to both comments. Severner should distinguish turbulence (chaotic flow) from cyclic oscillations, and JoSH should be aware that his comment applies only to a resonant system perturbed by a single impulsive event. It is extremely unlikely that a system that depends on a continuous energy flow could avoid some kind of oscillatory behaviour (possibly tending toward chaotic). If one considers, alternatively, that the economic *structure* is a stable entity, then one should note that it is perturbed by numerous shocks, not just one, and that any resonances in the structure will pick up those frequencies in the shock spectrum thus giving results that look like oscillations. In other words, DKMcK's ideal free market will not have cycles if events happen very slowly (by analogy, its Reynolds number is very low and the flow of energy/money is non-turbulent), but such a market will inevitably oscillate or break down into chaotic conditions when activity levels get high. -- Martin Taylor {allegra,linus,ihnp4,floyd,ubc-vision}!utzoo!dciem!mmt {uw-beaver,qucis,watmath}!utcsri!dciem!mmt