Proceedings of the 17th International Academic Conference, Vienna

NEWTON´S LAWS OF MOTION AND PRICE THEORY

TOMÁŠ R. ZEITHAMER

Abstract:

The paper focuses on factual research in bibliographic and biographical databases showing that representatives of the Czech School of Economics took a leading role in the methodological use of applied and theoretical physics in the basic economic research, especially in the second half of the twentieth century. The linear and non-linear analytical structures of theoretical physics are compared with the analytical structures of commodity price theory in a market with nearly perfect competition. Newton´s equations of motion for the non-relativistic speed of instantaneous relative depreciation and instantaneous relative commodity prices over time are analyzed. Assuming that the market value of a commodity is fully determined exclusively by the value of the instantaneous commodity price, the price jerk equation acquires a form corresponding to the non-relativistic equation for jerk in mechanics, following from Newton´s second law of motion. In this paper price jounce and price crackle are defined.

Keywords: Instantaneous relative depreciation, Newton´s laws of motion, market value, nearly perfect competition, price jerk, price jounce, price crackle

DOI: 10.20472/IAC.2015.017.113

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