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1.3.8. Fundamental Asymmetry of Time Series.


D.1. Fundamental Asymmetry of Time Series: There is a fundamental asymmetry between price relations over time - the price relations do not remain constant over time.

E.1. While within an Economic Analysis we are unconcerned with the reasons of variation in Given Data, we may at this moment, for sake of clear understanding of the subject, consult other sciences or observations and deduce something useful for our purpose. And accordingly, we find that changes in means, changes in techniques, changes in costs, changes in tastes, changes in demand, changes in institutions, and all sorts of changes neither do correlate with each other in perfect harmony, nor are of such magnitude that increase in one is compensated by decrease in another.

Accordingly, it follows that the exogenous factors, the given data of means and ends, vary in a fashion that resulting relative prices over time never remain symmetric. The price relations vary in an asymmetric fashion for most of the observed data. Since price itself results from demand, from supply, from cost, from taste, from techniques, from institutions, etc, and since all of these vary in a manner that does not guarantee that changes in price of one good will be compensated by changes in prices of others, time series of relative prices manifests an asymmetric path.

For all the aforesaid, it follows that the resources freed from decreased demand of one good will not be invested in production, and demand of other goods in such exact quantities that the same initial relations among all prices are established. For it is possible that a reduced demand in one good results in minor increase in  demand of several goods, major increase in demand of a very close but imperfect substitute, and no increase in demand of a complementary good. Tea, Coffee, Sugar, Bread, Cookies, Dry Fruits, Fresh Fruits, Vegetables, Lentils, Salt – a fall in price of any one of these would only result asymmetric change in demand and supply of others.


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