Walras' Unfortunate Legacy
AbstractWhat I argue in this paper is that the direction economics ,and particularly theoretical economics, took in the 20th century was to a great extent due to Walras' influence. This was not so much the result of his own results but rather a reflection of his vision. He was convinced that economics should have “sound mathematical foundations” and his concern for this is reflected in his correspondence with his contemporaries such as Poincaré. However, his specific vision of the nature of equilibrium became the benchmark for modern economic theory and led us to the Arrow-Debreu model which is characterised by its lack of institutional features, and the lack of any proof of stability under adjustment, as later to be shown by Sonnenschein, Mantel and Debreu. Above all there is no place in this framework for out of equilibrium dynamics. Whilst Walras is to be lauded for his insistence on the interdepence of markets, we should also be aware that he set us on a path towards economic models which, while admirably internally consistent, seem to be unable to match the empirical evidence. I fear that Walras would not have been unhappy with this outcome.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HAL in its series Working Papers with number halshs-00545181.
Date of creation: 09 Dec 2010
Date of revision:
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00545181/en/
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/
Walras; mathematical foundations; equilibrium; Arrow-Debreu model; interdependence of markets;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-23 (All new papers)
- NEP-HIS-2010-12-23 (Business, Economic & Financial History)
- NEP-HPE-2010-12-23 (History & Philosophy of Economics)
- NEP-PKE-2010-12-23 (Post Keynesian Economics)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statistics
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD).
If references are entirely missing, you can add them using this form.