Conservation Laws in Economics: What Doesn't Change

Paper 14draftIntroductory
Jon Smirl — March 2026
Abstract. Just as energy cannot be created or destroyed in a physical system, certain aggregate quantities in a CES economy are conserved during adjustment -- factor shares must sum to one, variance shifts between sectors rather than appearing from nowhere, and the total number of crises in a technology cycle is fixed by the economy's trajectory through parameter space.