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Temporary Disequilibrium And Money In A Classical Approach

Author

Listed:
  • Carlo Benetti
  • Christian Bidard
  • Edith Klimovsky
  • Antoine Rebeyrol

Abstract

This paper explores a way to extend Classical theory to the analysis of disequilibrium. It introduces money as a pure means of exchange. At variance with the theories of gravitation, it introduces a market mechanism to determine prices in disequilibrium and in equilibrium as well. Money and the rule of the formation of prices are strongly connected with Marx’s analysis of the social division of labour. It is shown how this rule, expressed in monetary terms, may solve some of the basic problems that Marx left open. Temporary disequilibria occur in both physical and monetary terms. In a bisector model, an institutional device for the settlement of monetary imbalances is introduced, which leads to the final allocations and effective productions. The dynamics of the economy are those of a sequence of temporary disequilibria, and allow several possibilities to appear (local or global stability, cycles) depending on the values of the parameters.

Suggested Citation

  • Carlo Benetti & Christian Bidard & Edith Klimovsky & Antoine Rebeyrol, 2015. "Temporary Disequilibrium And Money In A Classical Approach," Cahiers d’économie politique / Papers in Political Economy, L'Harmattan, issue 69, pages 159-184.
    • Handle: RePEc:cpo:journl:y:2015:i:69:p:159-184
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    Cited by:

    1. Frank Beckenbach, 2020. "A value-theoretic approach to economic dynamics and evolution—synthesizing different Marxian modules in a simulation model," Review of Evolutionary Political Economy, Springer, vol. 1(2), pages 221-243, August.
    2. Ghislain Deleplace, 2021. "From Ricardo to Sraffa: A Quest for a Modern Classical Standpoint on Money," Post-Print hal-04257009, HAL.
    3. Frank Beckenbach, 2020. "A value-theoretic approach to economic dynamics and evolution—synthesizing different Marxian modules in a simulation model," Review of Evolutionary Political Economy, Springer, vol. 1(1), pages 103-135, May.

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