Adaptation of the Principles of Classical Dynamics to Microeconomic

Abstract

The principles of classical dynamics are applied to economic processes. The author successfully overcame the main difficulty of the basic requirement for dynamics: a description of any process should be made in real (four-dimensional) «space-time». The economic meaning for all four coordinate axes is stated that allows to introduce the concept of force interaction. Besides, J. Hicks understood more than anyone that in the analysis of microeconomic models four dimensional space (including time axis) should be considered. Unfortunately, having denoted two axes as commodities and one as a time axis he found two axes to be interdependent that allowed him to turn to two-axes coordinate system. Such a conversion is only possible if initial space is heterogeneous. In reality, however, if price is a vector quantity it should act as a vector in any spatial dimension. As for the time axis is concerned it is definitely defined by scalar property. The nature of phenomena and substance we experience in our sensations is like this. Doubtfully, that market relations which had begun in human society from the time immemorial, are not specified by these properties. The consequence of homogeneity' of the space is that we are able to analyze free motion of the point-denoting commodity in the presence of force interaction in three-dimensional space. Free motion of the point-denoting commodity means the lack of any kind of forces that limit its trajectory in any direction. The motion of the point is defined as explicitly stated periodical fluctuations of each elementary axis parameter depending on time. That is why in our reasoning we proceeded from the fact that economic space is homogeneous. Later, using the principles of special theory of relativity we shall be able to set relationship between different coordinate systems of homogeneous space in economics modeling. The only purpose of this article is to find out the third previously unknown axis in economics. The technique used to find its meaning is following. Consider the nature of interaction linked with general utility of commodity' or with total costs using time axis of commodity' quantity in three-coordinate system. Then taking into account the nature of force interaction the projection of force interaction or rather projection of a resultant of a system of force interactions should be found. The later projections on to previously unknown axis three dimensional space will clarify its economic meaning.