Dynamics of production in many-sector approach

Abstract

In this chapter, we are returning to the many-sector model of production system, consisting of n production sectors, each of them creating its own product. The sectors are interacting with each other, as was described in Chap. 4, but to develop a description of the time behaviour of the system, one has to formulate the elementary laws of evolution for each sector. One can assume that production of value and dynamics of production factors in every sector are described in the same way as for the entire economy, according to the rules set up in Chaps. 5 and 6. The schematization of the production system allows us to formulate the simplest evolution theory including only three production factors in every sector. This allows one to draw a picture of economic growth, taking into account the specific features of each sector. As an illustration, development of the three-sector production system is considered.