What are the “market forces”?
The definition of market forces, economic kinematics, and a system of measurement units are new elements in the scientific literature of economics. A recently published book, Newtonian Microeconomics: A Dynamic Extension to Neoclassical Micro Theory by Palgrave Macmillan (2017), reforms the theoretical base of economics by defining, for the first time, the economic forces acting at the micro level. Docent Matti Estola, PhD, defines for the first time also the kinematics of economic quantities such as the flow and acceleration of production of a firm. The book extends the neoclassical framework of modelling in a way that allows us also to describe dynamic events together with equilibrium behaviour.
According to Estola, the theoretical base of economics needs a reform because in the current neoclassical framework, only optimal behaviour of economic units is modelled. The growth of a firm or its possible bankruptcy cannot be explained by using the neoclassical framework. Estola shows in the book that these examples, together with the profit maximizing behaviour assumed in the neoclassical framework, are special cases of the same model. The observed dynamics in consumption can also be explained by the forces acting upon the consumption of goods, and the same holds for price changes of goods and assets. Estola applies throughout the book a system of measurement units for economics, which guarantees that the theoretical concepts have exact counterparts in the real world. This makes the testing of economic theories accurate.
The book by Matti Estola, Newtonian Microeconomics: A Dynamic Extension to Neoclassical Micro Theory (ISBN: 978-3-319-46878-5) was published in January 2017 by Palgrave Macmillan. (http://www.springer.com/us/book/9783319468785)
Further information, please contact: Lecturer Matti Estola, University of Eastern Finland, tel. +358-50-3076650, matti.estola(at)uef.fi