Spontaneous Economic Order
AbstractThis paper provides an attempt to formalize Hayek's notion of spontaneous order within the framework of the Arrow-Debreu economy. Our study shows that if a competitive economy is enough fair and free, then a spontaneous economic order shall emerge in long-run competitive equilibria so that social members together occupy an optimal distribution of income. Despite this, the spontaneous order might degenerate in the form of economic crises whenever an equilibrium economy approaches the extreme competition. Remarkably, such a theoretical framework of spontaneous order provides a bridge linking Austrian economics and Neoclassical economics, where we shall comprehend a truth: "Freedom promotes technological progress".
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Bibliographic InfoPaper provided by arXiv.org in its series Papers with number 1210.0898.
Date of creation: Oct 2012
Date of revision: Sep 2013
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Web page: http://arxiv.org/
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-13 (All new papers)
- NEP-HME-2012-10-13 (Heterodox Microeconomics)
- NEP-HPE-2012-10-13 (History & Philosophy of Economics)
- NEP-MAC-2012-10-13 (Macroeconomics)
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