A one-sector dynamic model of the economy of a country

The model of the present paper has been made for long range predictions of the behaviour of a developing economic system. The production of the system has been aggregated very far, there is only one product, the gross national income while the input is the labour. The system is financed by a system of private banks. The people involved in the functioning of the system are assumed to consist of only two groups, the workers and the owners. The model is a modification of that of A. A. Petrov, I. G. Pospelov, A. P. Krutov and A. V. Romanko to include the effect of the reorganization process and the steady increase of the wages of the workers imposed upon the system of the trade unions. In normal conditions only a part of the industry is active. This part in chosen in such a way that profit becomes maximal. As expences appear, besides the wages of the workers, also the maintenance costs of the inactive part of the industry as well as the support paid to the laid out workers. It is assumed that a closed factory has to pay this support.