Alfred Amonn, Die Probleme der dynamischen Gleichgewichtstheorie (1956)

Amonn’s review essay examines dynamic equilibrium theory through Willy Kraus’s Wirtschaftswachstum und Gleichgewicht. He situates the debate within the movement from Walrasian statics through business-cycle and employment theory toward theories of development. His central concern is that models of quantitative expansion do not adequately explain qualitative changes in economic structure.

The first task is conceptual. Amonn distinguishes the definition of equilibrium from the problems involved in explaining its existence and stability:

Nun muss man wohl zwischen dem Begriff und der Problematik unterscheiden.

English translation: Now one must surely distinguish between the concept and the range of problems.

Differences between static and dynamic problems need not prevent their equilibrium concepts from sharing a foundation. But defining dynamic equilibrium as necessarily steady growth would prejudge whether uneven development can avoid cumulative expansion or contraction. Amonn therefore favours a definition centred on the absence of self-reinforcing deviations, while acknowledging only a qualified correspondence between the concepts:

Dann haben wir keine vollständige, aber immerhin eine gewisse Parallelität zwischen den beiden Begriffen des statischen und des dynamischen Gleichgewichts.

English translation: Then we have no complete, but at any rate a certain, parallelism between the two concepts of static and of dynamic equilibrium.

This qualification also governs his treatment of money. Monetary equilibrium may characterize a stationary or a developing economy; it cannot simply be identified with equilibrium growth.

Wenn nun Kraus meint, das monetäre Gleichgewicht könne «materiell nichts anderes besagen als Gleichgewicht der wachsenden Wirtschaft», so kann man dem nicht schlechthin zustimmen.

English translation: If Kraus now holds that monetary equilibrium can "materially mean nothing other than the equilibrium of the growing economy," one cannot simply assent to this.

Amonn’s distinction between growth and development extends this critique. Population, capital, and output can increase proportionately without changing production methods or output per head. Development, by contrast, involves structural transformation and improved per-capita provision; aggregate output need not increase. Conflating these processes privileges expansion of an existing productive apparatus over technical change and capital deepening.

This distinction organizes his assessment of Cassel, Harrod, and Domar. Cassel clarifies how production can expand alongside population, but an unchanged production structure cannot explain development. Increasing capital per worker, Amonn argues, cannot simply leave that structure intact. Harrod’s distinction between warranted, natural, and actual growth rates advances the analysis by asking whether investment decisions are subsequently validated. Yet assuming technological improvement does not explain its effects on the equilibrium path. Domar identifies investment’s simultaneous effects on income and productive capacity. Coordinating these effects is necessary for continued full employment, but full employment remains a particular objective, not the definition of dynamic equilibrium.

Amonn also questions Kraus’s interpretation of saving and investment through ex-ante and ex-post categories. He emphasizes instead the distinction between individual monetary saving and economy-wide real saving. Private savings and real capital formation are different economic objects. Assertions that saving necessarily equals investment and that the two can diverge may therefore concern different meanings of the same terms. Conceptual clarification can dissolve apparent disagreement without settling the substantive conditions of growth.

The monetary discussion contrasts expansionary models with Koopmans’s and Hayek’s approaches to neutral money. Amonn rejects the conceptual necessity of uniting the medium of exchange and unit of account, pointing to their separation during inflation. He nevertheless accepts the objection that monetary equilibrium cannot be derived merely by reproducing barter relations. Hayek gives capital deepening greater attention, but the practical organization of money supply remains unresolved. Amonn questions existing bank provision and tentatively considers Emil Korner’s labour-based currency proposal without presenting it as an established solution.

The essay finally separates equilibrium from both steadiness and full employment. Deviations need not become cumulative, and entrepreneurial adjustment may lead toward a changed equilibrium path. Conversely, warranted investment and utilized capacity can coexist with unemployment. These possibilities expose the limits of models that leave relative prices, new goods, consumption changes, and structural transformation insufficiently explained.

Amonn calls for common starting assumptions followed by the successive introduction of changing economic conditions. General equations alone cannot supply the missing account of development. His practical conclusion is restrained: equilibrium theory does not yet offer a dependable programme for uninterrupted growth, but it can help identify disturbances and guide policies intended to prevent cumulative deviations and correct their consequences.