THEORY of ECONOMIC DEVELOPMENT (cont.)

SSET 27 (cont.) – THEORY of ECONOMIC DEVELOPMENT

Diagnosis of an economy

This work is a continuation of the SSET 27. We are going to compare four stages of economic evolution: one with more (q₂ ˃ q₁) or less (q₂ ˂ q₁) quantity of economic goods tan another (q₂ ˃ q₁), with different valuations for both cases (I²_e ˂ I¹_e and I²_e ˃ I¹_e), which we analyze through the Evolutionary Medium Point (EMP).

CASE 1-a: q²_e ˃ q¹_e and I²_e ˂ I¹_e

We represent this case in graph 1-a. With U¹ we see a “witness” economy that will be compared with another U², according to the “closed-box” of the relative wealth to itself.

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