Normalised General Coordinates and Vertically Integrated Sectors in a Simple Case

The author presents new analytical tools developed by himself and Richard Goodwin for analysing modern economic systems. The paper aims at overcoming the difficulties of interdependence among the various sectors of an economy; in the case of Goodwin, by a transformation of the equation systems to normalised general coordinates, which eliminates interdependence completely; in the Author’s case, by constructing vertically integrated sectors, which separate out and re-classify all processes, according to the final goods for which they are eventually working. The paper explores connections an relations between the two approaches. This is done by taking advantage of the properties of a particularly simple technology, which always maintains the analysis within the field of real nonnegative numbers, i.e. within a field where economic interpretation is intuitively obvious and immediate