Logistic Theory of Capital
The most significant achievement of the Economic Logistic Analysis Group is the release of a monograph by prof. S. Girdzijauskas Logistic Theory of Capital Management; Deterministic Methods, Vilnius: VU Press, 2006, 232 p.
This book has also been translated into English as an annex of a magazine which is placed in the database of Information Institute (IS): The Logistic Theory of Capital Management: Deterministic Methods; Monograph No 1, published a peer-reviewed Supplement A to Transformations in Business & Economics, Vol. 7, No 2(14), 2008, 163 p.
The monograph presents the result of a year-long thorough work; it is an original theory which shows that the system of decisions grounded by the model of logistic development of population is unitary and comprises an autonomous theory. Logistic theory of capital management is based on the main principles which were developed in the classical theory of finances. The latter, while investigating the dynamics of the capital, is based on the exponential development; the principle of compound interest. Logistic theory is grounded by the function of restricted (logistic) increase, which is mainly composed of the totality niche of potential capital and restricted size capital.
While investigating the fluctuation of capital niche, the group of the faculty‘s scientists deduced that the phenomenon of “economic bubble” exists, thus they composed its mathematic model and examined it. The results of the research allowed to the researchers to make a conclusion that the development of economics has recently reached a phase of saturation in a number of developed (or rapidly growing) economic regions of the world (including Lithuania). Therefore it seemed necessary to find new resources for extensive development of economics (GDP, work force, capital, etc.) or using the improvement of science and technology to step into a new stage of the development of economics. The current situation which is observed in a number of economies of economic regions is explained in terms of high level of inflation, unsuccessful policy of bank credits, overheat of economics or other factors, yet it actually is the outcome of a long-term borrowing and saturation in economics.
The scientists also determined that in the core EU countries the problem of economic growth saturation was solved by expanding ES territorial areas, attaching new countries and securing the free movement of capital, work force and goods in the EU. Having failed to achieve ambitious goals determined by the EU Lisbon strategy in the sphere of technological development, economic competitiveness and employment, the EU still prefers extensive route of economic development, which is also chosen by Lithuania while solving the problem of shortage in the areas of work force, energetic and other resources. The scientists of the centre deduced that having lost the possibilities to develop the economy extensively, the harshest danger for the development of the economics, especially in the long run, is a slow technological development and long-term borrowing.
This material of the research is constantly being published in prestigious scientific journals, seminars and international conferences.
The monography presents the main principles of the original logistic theory of capital management. Capital management with restricted resources help to calculate more accurately and correctly certain financial operations, to reduce the possibility of incorrect decisions. The book shows that logistic theory allows to perform all usual financial operations: to calculate interest, to discount values, to identify current and future money values, to calculate annuity, rent, etc.
A special attention in the book is placed on the logistic management of money flow, the evaluation of investment projects, the calculation of insurance rate, modelling of the stability of financial pyramids. A certain mathematical model is presented which explains the mechanism of the formation of price bubbles.
The monograph is dedicated to scientific staff interested in quantitative methods of financial operations, also to university students: master and doctoral students of finances, economics or business management, information technology application. It would also useful for business practicians interested in the usage of rational investment or the evaluation of determined financial risk.
