Courses : Intermediate Macroeconomics Lecturer : Frischa Adellia Semester : 4th Semester, 2022/2023 Sesion Dynamic Equilibrium In A Dynamic Economy Dynamic equilibrium is a concept in economic theory that refers to a situation in which an economic system tends towards a long-term equilibrium point after experiencing short-term disturbances. This concept shows that even though there are fluctuations in the economy, in the long run the economy tends to return to a balance point. The equilibrium point can be a position where prices and output are produced at the same level, a situation where the unemployment rate is at the natural level, or a situation where the amount of saving equals the amount of investment. At these equilibrium points, the economy experiences a balance between demand and production and demand and supply. An example of dynamic equilibrium is the process of price adjustments over a relatively short period of time to restore long-run equilibrium. If there is an increase in demand for a product, the price will rise while producers will increase production to meet the higher demand. Within a certain period of time, prices and production will reach a new equilibrium point. Dynamic equilibrium in economics refers to a situation when inputs, outputs and prices move at a steady rate over time. This means that there is no excess demand or supply in the market, and the economy is operating at optimal levels of output. Dynamic balance can be achieved in the long run by optimizing the production, distribution and use of economic resources. In the Solow-Swan model mentioned earlier, a dynamic equilibrium is reached when the rates of saving, investment and population growth balance with the rate of technological progress. However, dynamic equilibrium is not always achieved in practice, and economies often experience fluctuations and imbalances in the short and medium term. Therefore, economic policies, such as monetary and fiscal arrangements, can be used to try to correct imbalances and promote dynamic equilibrium in the short run. Another example of dynamic equilibrium is in natural ecosystems, where populations of animals and plants fluctuate in the short run but reach a long-term equilibrium where populations stabilize. In this case, factors such as predators, prey, weather, and the environment affect the dynamic balance in the ecosystem. Dynamic balance refers to a situation where a system continues to move in equilibrium despite external changes or disturbances. In the economic context, dynamic balance refers to the ability of an economy to maintain relatively stable levels of output and unemployment over the long term despite economic fluctuations. Some of the characteristics and characteristics of dynamic balance in the economy are: 1. Stability: Dynamic balance reflects the stability of the economy in the long run. A dynamically balanced economy can withstand market volatility and economic fluctuations and maintain stable levels of output and unemployment. 2. Interrelatedness: The dynamic equilibrium in the economy is concerned with the interrelationships between various economic factors, such as investment, consumption and production. Any change in any of these factors can affect the overall dynamic balance. 3. Continuous balance: Dynamic balance is a continuous process and always changes over time. A dynamically balanced economy must continuously adapt to changes in the economic environment and other factors that influence it. 4. Effects of economic policies: Economic policies can influence the dynamic balances in the economy. Fiscal and monetary policies can be used to accelerate or slow down economic growth and influence unemployment and inflation rates. 5. Global integration: In the era of globalization, the world economy is increasingly integrated. Therefore, the dynamic balance in one country's economy can be influenced by factors in other countries. An example of a dynamic balance in the economy is the balance between inflation and unemployment. If the inflation rate is too high, the unemployment rate may decrease due to increased demand. However, if the unemployment rate is too low, then the inflation rate may increase because demand exceeds supply. Therefore, the dynamic balance between inflation and unemployment must be maintained to maintain economic stability. Dynamic balance is a condition in which all elements in a system or environment can interact stably and influence each other positively so as to create balance and long-term sustainability. Another example of dynamic equilibrium is in a tropical forest ecosystem. In it, plants and animals depend on and influence each other. Plants need animals to help them disperse seeds and aid in pollination, while animals need plants as a source of food and shelter. Stable environmental conditions such as humidity, temperature, and rainfall allow this interrelationship to continue and create a dynamic balance that allows the survival of the environment in the long term. Dynamic balance can be found in various fields, such as economics, ecology, physics, and others. Here are some examples of dynamic balance: 1. Market Price Equilibrium In economics, market price equilibrium occurs when the price of goods or services offered by producers is equal to the price that consumers are ready to pay. If the price is too high, consumers will reduce purchases and producers will lower prices to increase sales. Conversely, if the price is too low, producers will reduce production and prices will rise. 2. Population Balance Population equilibrium occurs when the birth and death rates in a population are equal. If the birth rate is higher than the death rate, the population will increase. Conversely, if the death rate is higher than the birth rate, the population will decrease. 3. Ecosystem Balance Ecosystem balance occurs when the number of species and natural resources in it is in the right proportion. Each species plays an important role in maintaining the balance of the ecosystem. For example, plants produce the oxygen needed by animals, while animals help pollinate plants. 4. Chemical Balance Chemical equilibrium occurs when the amount of chemical substances in a chemical reaction is at the right level. When a chemical reaction takes place, the amount of reactants and products must be in proper proportions to reach equilibrium. 5. Physical Balance Physical balance occurs when the forces acting on an object are the same. An example is the balance of a ball on a table. The ball will remain at rest on the table because the force of gravity pulls the ball down and the normal force of the table keeps the ball from falling. Those are some examples of dynamic balance in various fields. It is important to understand this balance in order to maintain the stability and viability of the systems that surround us.