Topical comment: essays in dynamic economics applied

The sub-title of this book might be thought pretentious; it is intended to be provocative. There is, of course, no settled corpus of doctrines that can be called 'dynamic economics'. Thus it might be held that dynamic theory is as yet by no means ripe for 'application' to practical affairs. I have felt myself, on the contrary, ever since the last war, that valuable lessons might be learnt by viewing passing events in the light of a dynamic theory, however rudimentary it might be. The followers of Adam Smith did not wait a hundred years, namely until the static parts of his system were perfected by Alfred Marshall and his continental contemporaries, before applying his thought to current affairs.
It is possible that the attempt to understand passing events in terms of an elementary dynamics may bring to light, more clearly than attempts at elaborate model building, the crucial importance, hitherto unsuspected, of certain factors. It was, for instance, by repeatedly reviewing the progress of events against a background of dynamic theory, that I became convinced that the volume of orders on investment account plays a more important part in the contemporary trade cycle pattern than the volume of investment itself. Another finding was that variations of output per person employed have at least a parity of importance and indeed a greater importance for prompt and appropriate policy reactions by comparison with variations in the level of employment.