THE ANALYSIS OF ECONOMIC SYSTEMS 
RICHARD {STONE 
Cambridge University - Cambridge - Great Britain 
MODELLING ECONOMIC SYSTEMS 
t. THE BACKGROUND 
It has long been a commonplace that an economy is a 
system, an exceedingly complex probabilistic system. Accord- 
ing to the classical theory, the information flowing in this 
system consists of price signals. Constrained principally by 
the law and public opinion on the one hand and by the state 
of technology on the other, individuals and groups respond 
to these signals mainly in terms of self-interest. First, the pro- 
ductive part of the system produces as efficiently as possible 
what the consuming part wants to consume. Second, in every 
part of the system strong tendencies exist to check any depar- 
ture from equilibrium. Third, not only is every firm efficiently 
operated but new ideas and inventions are adopted as soon 
as they become profitable and so the standard of living grows 
as fast as human ingenuity can make it. In other words, the 
system is efficient, stable and progressive. It gives the maximum 
1 Stone - pag. I