The notion of solution plays a crucial role in the conceptual system of Léon Walras, the founder of General Equilibrium Theory (GET). In this paper, after introducing the two solution concepts employed by Walras in the development of his version of GET, respectively called the “theoretical” and the “practical” solution, we discuss the problems such peculiar conception gives rise to, as well as the attempts Walras makes to dodge them. In particular, after showing how Walras tries to connect his two solution concepts by means of the well-known tâtonnement construct, we explain why Walras’s attempts turn out to be defective and elucidate the negative effects that this deficiency exerts on his overall theoretical system, as expressed in the various editions of the Eléments d’économie politique pure. Then we examine the stance taken by Vilfredo Pareto, Walras’s immediate successor and co-founder of GET, as regards the issue of the solvability of general equilibrium models. After explaining why Pareto substantially neglects Walras’s tâtonnement construct and, as a consequence, the “practical” solution concept as well, we discuss the dramatic evolution of Pareto’s ideas about the computability of economic equilibrium, over the period ranging from the publication of the Cours d’économie politique to the appearance of the Manuel d’économie politique, showing how his mature positions on this issue, as can be found expressed in the Manuel and later writings, significantly affect some later interpretations of the scope and significance of GET, such as Hayek’s
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Paper provided by Department of Economics University of Milan Italy in its series Departemental Working Papers with number
2006-31.
Find related papers by JEL classification: B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (includes Austrian, Marshallian, Walrasian) B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics B31 - Schools of Economic Thought and Methodology - - History of Thought: Individuals - - - Individuals B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology C62 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Existence and Stability Conditions of Equilibrium C68 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Computable General Equilibrium Models D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
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