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506 Jean Piaget
C(t) = c.Y(t) and I(t) = v - dY(t.J
dt
c and v being respectively the marginal propensity towards consumption and
the investment coefficient.
The former is a function of consumption of the most common type. The
second law translates globally the reactions to the investment decisions of
economic agents faced with variations in the national income: we have here,
in its simplest form, the well-known phenomenon of the accelerator which
‘repercusses’, as regards investment, the variations in the national income. This
elementary dynamic model may then be reduced to the differential equation
-=-- I-c I dY(t)
v Y(t) dt
the immediate solution of which, taking account of the initial condition
Y(o) = YO, is Y(t) = Yoopt with, for the sake of simplification,
p=-=--,
I-c s
v v
where S represents the marginal propensity to save. The rate of growth p,
normally positive, is therefore proportional to the propensity to save and in-
versely proportional to the investment coefficient. The model can then be
represented by the following diagram in which the circles represent variables
and the parallelograms represent the transformations undergone by them (in
the direction of the arrows):
Feedbacks may be recognized in the two loops of the diagram. The first trans-
lates the ‘multiplicator effect’: Y(t) is self-influencing through the agency of
C(t). The second translates the ‘accelerator effect’ : Y(t) is self-influencing
through the agency of I(t). Both effects are additi~e.3~
The method of which the foregoing is a concrete example offers two advan-
tages, one from the viewpoint of economic research itself and the other in that
it supplies a representation of mechanisms common to all the life and human
sciences (not only because loop systems are found in them all but also because
circles of production, consumption and investment recur in all fields of values
of finality as well as values of yield).
From the viewpoint of economic science (which, we repeat, can serve as an
example because, inter alia, of its infinite possibilities of measurement), patterns