Movement Of Wealth
Economists say that Law of Equilibrium applies to systems of wealth as well. There is no clear idea as to how this Law operates. In systems of matter and energy equilibrium is reached by movement of matter/energy from higher level/concentration to lower concentration. Similar process operates in systems of wealth of different concentrations connected to each other. To express concentration two forms of wealth are required. When we say 4% sugar solution, 4 grams of sugar is dissolved in 100 grams of water. Here two forms of matter; solute and solvent are involved. Similarly in price(price is one expression of concentration of wealth) two forms namely money and goods are involved. Concentration of one form of wealth is always reciprocal of concentration of other form of wealth. In some cases only one form of wealth is mobile and other is static. I have termed such movement as Osmotic Movement of Wealth. When wealth moves from higher concentration to lower concentration, a)Increased savings; b)Increased returns; c) decreased cost OR all three above result.
|Date of creation:||15 Feb 2005|
|Note:||Type of Document - doc; pages: 10. Matter, energy and wealth have two common properties. Law of Conservation an Law of Equilibrium are two important laws that apply to all three. Both the laws are inseparable and do not operate in isolation.|
|Contact details of provider:|| Web page: http://econwpa.repec.org|
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