Economics Made Simple

Over at Brad DeLong's blog Brad is discussing some moderately abstract economic principles in trying to figure out what the future value of some present investment is worth.

I went off on somewhat of a tangent relative to the question by looking at how changing the delay from investment to reward might affect the problem.

What is the value of reducing delay in the system?

Suppose for an investment of x fruits you can reduce the delay from 15 years to 5 years to fruit production?

In any case, as in all control systems, shortening inherent delays adds stability to the system.

Or think of an economy as a preditor-prey oscillator coupled in n dimensions (lots of predators competing with lots of prey). Oh yeah. The gain factor and coupling of each oscillator is not fixed.

Any way, the period of the oscillation is an inherent function of the delay. The shorter the delay the less the following error and overshoot. Too much overshoot and the system oscillates. Boom is following delay - demand increasing faster than supply. Bust is overshoot.

H/T Jane Galt via Instapundit.