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Marshall on equilibrium and time: a reconstruction

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  • Michel De Vroey

Abstract

This paper's aim is to offer a reconstruction of the Marshallian conception of equilibrium and time. Its main features are as follows. First, I argue that the hallmark of this conception is to posit an interrelationship between two equilibrium concepts — market-day and normal equilibrium. I claim that they are part and parcel and cannot be analysed separately. Second, my reconstruction gives a central role to the market period. Third, I argue that the so-called short and long-period equilibrium concepts refer to the same unique concept of normal equilibrium. Fourth, I argue that Marshall's value theory admits the effective existence of disequilibrium states. A Marshallian disequilibrium refers to cases where market-day and normal values fail to coincide, this state of affairs going along, however, with market clearing. I also propose an alternative interpretation of Marshall's corn model wherein perfect information is considered the linchpin of achieving equilibrium. Finally, I argue that my reconstruction avoids a series of interpretative pitfalls.

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  • Michel De Vroey, 2000. "Marshall on equilibrium and time: a reconstruction," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 7(2), pages 245-269.
    • Handle: RePEc:taf:eujhet:v:7:y:2000:i:2:p:245-269
    DOI: 10.1080/096725600361807
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    References listed on IDEAS

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    1. Philip L. Williams, 1986. "A Reconstruction of Marshall's Temporary Equilibrium Pricing Model," History of Political Economy, Duke University Press, vol. 18(4), pages 639-653, Winter.
    2. Milton Friedman, 1971. "A Theoretical Framework for Monetary Analysis," NBER Books, National Bureau of Economic Research, Inc, number frie71-1, March.
    3. Hicks, J. R., 1979. "Critical Essays in Monetary Theory," OUP Catalogue, Oxford University Press, number 9780198284239.
    4. John Aldrich, 1996. "The Course of Marshall's Theorizing about Demand," History of Political Economy, Duke University Press, vol. 28(2), pages 171-217, Summer.
    5. De Vroey, Michel, 1999. "Equilibrium and Disequilibrium in Economic Theory: A Confrontation of the Classical, Marshallian and Walras-Hicksian Conceptions," Economics and Philosophy, Cambridge University Press, vol. 15(2), pages 161-185, October.
    6. De Vroey, Michel, 1999. "The Marshallian Market and the Walrasian Economy. Two Incompatible Bedfellows," Scottish Journal of Political Economy, Scottish Economic Society, vol. 46(3), pages 319-338, August.
    7. Ragnar Frisch, 1950. "Alfred Marshall's Theory of Value," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 64(4), pages 495-524.
    8. D. A. Walker, 1969. "Marshall's Theory of Competitive Exchange," Canadian Journal of Economics, Canadian Economics Association, vol. 2(4), pages 590-598, November.
    9. Negishi,Takashi, 1985. "Economic Theories in a Non-Walrasian Tradition," Cambridge Books, Cambridge University Press, number 9780521259675.
    10. George J. Stigler, 1992. "Marshall on Market Price," History of Political Economy, Duke University Press, vol. 24(4), pages 967-971, Winter.
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    Cited by:

    1. Michel De Vroey, 2004. "Lucas on involuntary unemployment," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(3), pages 397-411, May.
    2. Juli Radev, 2011. "Static and dynamic market disequilibrium," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 36-63.
    3. Michel, DE VROEY, 2004. "On the Right Side for the Wrong Reason : Friedman on the Marshall-Walras divide," LIDAM Discussion Papers IRES 2004015, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    4. Emeric Lendjel, 2000. "The statistical origin of the cobweb diagram," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-03243880, HAL.
    5. Michel De Vroey, 2006. "The temporary equilibrium method: Hicks against Hicks," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 13(2), pages 259-278.
    6. Emeric Lendjel, 2000. "The statistical origin of the cobweb diagram," Post-Print halshs-03243880, HAL.

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