Walras’s law of markets as special case of the general Triangle Theorem: a laconic proof
AbstractFrom the set of the first three structural axioms follows the - economic - triangle theorem. It asserts that the product of the three key ratios, which characterize the firm, the market outcome, and the income distribution, is always equal to unity. The theorem contains only unit-free variables, is testable in principle, and involves no behavioral assumptions. The differentiated triangle theorem applies to an arbitrary number of firms. Therefrom Walras’s Law can be derived without recourse to demand and supply functions or the notion of equilibrium.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 44547.
Date of creation: 22 Feb 2013
Date of revision:
new framework of concepts; structure-centric; axiom set; market clearing; commodity market; labor market; full employment; wage rate flexibility;
Find related papers by JEL classification:
- C00 - Mathematical and Quantitative Methods - - General - - - General
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-16 (All new papers)
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