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27 July 1951

Dr Wil aam J. Bauraol,
Dept. of Econo^cs and Social
Institutions,
Princeton University,
New^ersey,
USA f
Dear Dr Baumol,
Thank you very much indeed for sending me your book on
Economic Dynamics, which I think is extremely useful for my st.udents.
Moreover I am sure that I shall also find myself nany useful points of
view expressed in it. Since you might be interested in some papers on the
subject T produced some time ago, I have pleasure in sending you offprints
of them under separate cover. Please, consider them as an interest in your
work. Unfortunately I have no offprints left of my articles in "Weltwirtschaftliches nrchiv" 1931 and 19^2, which might also be of some interest
to your subject.
Recommending myself for any criticism you might formulate
and thanking you again, I am,
yours very sincerely,

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/'

ECONOMIC
DYNAMICS:
an introduction
•

by William J- Baumol
with a chapter by Dr. Ralph

Turvey

• a survey of analyses of economic
processes involving time
• an introduction to the mathematical
techniques employed
• a summary of important recent
theoretical developments

William J. Baumol is Assistant Professor, Dept. of
Economics and Social Institutions, Princeton University. He received his
Ph.D. from the
London
School
of
Economics,
where he was
Assistant
Lecturer. He has served as
an economist
with the
Dept. of Agriculture.

New and important to teachers
and students because it is—
• The only elementary exposition, complete with problems
and answers, of the basic mathematical techniques of
dynamic economic analysis.
• A completely self-contained treatment which can be
studied by anyone at all acquainted with the techniques
•of economic analysis even though he has not previously
worked with dynamics.
• The only text which explains recent and continuing developments in economic theory which are receiving the
utmost attention in the profession but which are tor the
most part exceedingly difficult in the original.

For advanced economics courses, the first
comprehensive study of economic dynamics
The first textbook treatment of a greater part
of this subject, this new book explains the
methods a n d principal contributions in the
analysis of the development of economic
p h e n o m e n a with the p a s s a g e of time. At the
same time it makes available to the general
student some^B the mos^wiportant recent
developments m economic theory a n d provides him with m a t h e m a t i c a l t e c h n i q u e s
which he may later use to embark on his own
research. It points out the importance of
dynamic theory in the study of all economic
theory, reminding its readers that static problems cannot be discussed without reference,
however implicit a n d rudimentary, to dynamical considerations.
Divided into three parts, the book begins with
a section entitled "Magnificent Dynamics"
a n d characterized methodologically by the
use of sweeping generalizations as to techn o l o g y a n d t h e p s y c h o l o g y of t h e community. The subject matter is the development of economics as a whole over long periods of time or the evolution of capitalism.
Included a r e ^ k e works ^ k R i c a r d o , Marx,
Schumpeter, c^Ë Harrod. ^ ^
"Statics Involving Time/' the second part of
the text deals with influence of the recogni-

tion of the existence of c h a n g e by members
of the community on the economic situation
at a particular moment. Methodology used is
essentially that of static analysis. Much of
the work of Hicks, Lange, a n d Samuelson is
included.
"Process Analysis/' the third section, deals
primarily with the analysis of d a y to d a y
developments in the economy a n d its parts.
In addition to discussion of the contributions
of Samuelson, the Swedes, Metzler, Domar,
etc., this includes the only available selfcontained introduction to the mathematical
techniques of dynamic analysis so completely
a n d comprehensively explained as to require
no more than an elementary high school
algebra background. The use of difference
a n d differential equations, which is rapidly
becoming one of the most important tools of
the economic theorist, is given here a n elementary exposition.
An important chapter, written by Dr. Ralph
Turvey of the London School of Economics, is
also here, describing developments in Scandinavia from where some of the most important non-English l a n g u a g e contributions to
the subject h a v e originated. This is the only
such summary available in English.

• A useful reference for professional economists, especially those who are interested in but do not specialize
in the branch dealt with.
• The only summary available in English of valuable recent Scandinavian developments—among
the most important non-English language contributions of our time.

ECONOMIC DYNAMICS

\

BAUMOL: Economie Dynamics
Preface
1. Introductory
Part I THE MAGNIFICENT DYNAMICS
2. The Classical Dynamics
3. The Dynamics of Marx and Schumpeter
4. Mr. Harrod's Model
Part II

STATICS INVOLVING TIME

5. The Equilibrium of the Firm
Appendix: Uncertainty and the Equilibrium of the Firm
6. Price Flexibility and the Equilibrium of the Economy
7. Dynamics, Comparative Statics and the Stability of Static
Equilibrium
Part III

PROCESS ANALYSIS

8. Period Analysis
Appendix: A Note on Functionals
9. Some Simple Dynamic Models and the Technique of Their
Construction
10. Some Simple Dynamic Models (Continued)
11. Some Simple Dynamic Models (Concluded)
Appendix: Examples of the Solution of Higher Order Systems
12. Simple Differential Equation Systems
A Short Reading List
Answers to the Problems
Index

Coming in June, c.254, probably $5.00

THE MACMILLAN COMPANY, 60 Fifth Ave., New York 11
D-1933-Printed in U.S.A.-L-5-51