Revision: Theory of Income and Employment >> Basic Concepts of Macro Economics Economics ISC (Commerce) Class 12 CISCE

According to Oxford Dictionary of Economics, "A quantity which is liable to change is known as a variable."

According to Prof. Stigler, a partial equilibrium is one which is based only on a restricted range of data.

• "General equilibrium for the entire economy could exist only if all economic units were to achieve simultaneous partial equilibrium adjustment." - Leftwitch
• According to Stigler, theory of general equilibrium is the theory of inter-relationship of all units of economy. 

• "The stationary state is an economy in which the tastes, resources and technology do not change through time." - Prof. Stigler
• "Economic statics are those parts of economic theory where we do not trouble about dating. Thus, 'statics' studies stationary situations which are devoid of any change and which do not require any relation to the past or future." - Hicks

• "Dynamic analysis may be defined as the study of the behaviour of systems, single markets or whole economics, in disequilibrium conditions." - Prof. Lipsey
• "Economic dynamics refers to those parts of economic theory where the problem of dating is conspicuously important." - Prof. Hicks
• "Economic dynamics is the study of economic phenomenon in preceding and succeeding events." - Baumol

• Equilibrium means a position of rest, with no tendency to change under existing conditions.
• Partial equilibrium looks at one unit or one market at a time, assuming all other things are constant.
• Consumer’s, producer’s, firm’s, and industry’s equilibria are all examples of partial equilibria.
• General equilibrium exists when all important markets and units in the economy reach equilibrium simultaneously, and their decisions are mutually consistent.
• Walras used a system of simultaneous equations to show general equilibrium for all markets, while Leontief used input–output analysis to trace interdependence among industries.

• Static analysis: one equilibrium, no change in conditions.
• Comparative statics: two equilibria, before and after a change in an outside factor.​
• Change in demand or supply shifts the curve, giving a new equilibrium price and quantity.​
• Both methods ignore the adjustment path; they only compare equilibrium “snapshots.”

• Dynamics in economics means study of change through time.
• Static analysis compares equilibrium positions at a point; dynamic analysis explains how we move from one position to another.
• Time and sequence of events (past → present → future) are central in dynamic economics.
• In price determination, dynamic analysis traces the path of price adjustment from disequilibrium to equilibrium.
• Dynamic economies show growth in population, capital, technology, and changing habits and institutions.