Ian: > Isn't it Robert Lucas' contention that the economy is > always in equilibrium?
I don't know but saying what the author of the article you sent says is same as saying that any physical motion is in dynamic equilibrium: > For me, the investment world is constantly in equilibrium - > but it is an equilibrium that is constantly moving. It is > instantaneous, but instantaneously morphing. A dynamic equilibrium can be a constantly moving, instantaneously morphing equilibrium but it does not mean that all motions that are close to it will fluctuate about it. It depends on whether the equilibrium is stable or not. If not, then some motions may move away from it wildly until they find another dynamic equilibrium elsewhere, unless of course they come to a complete halt. This is for physical motions. Do we have any proof that economic motions are any different? Sabri
