Economic equilibrum and friction

Advances in index-numeber theory have made it possibile to restate concisely and simply certain salient features of mathematical ecnomics relating to a pricing equilibrium. The pricing system may be regarded as a function of the subdivision of each commodity as it is distributed by the sellers to the buyers, and both quatity and value indexes may be derived from the data of such disposals of goods in a unit cleared market, or a succession of such markets. Theorically, the price level of the flow of goods is always unity, though it varies in a reciprocal relation to each commodity taken as a standard of value, and the avarage of the possible price levels thus resulting is always unity. Margial productivity, the real interest rate, and capitalization values may be expressed by suitable curves and their derivatives. Such a schematic description of markets makes possible a delineation of the chied factors involved in "capital pressure" and the disequilibria characterizing major depressions.