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The Relevance of the Marshallian Concept of Normality in Interior and Inertial Dynamics as Revisited by Shackle and Kornai

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  • Vahabi, Mehrdad

Abstract

This study endeavors to explicate the relevance of the Marshallian concept of normality in the evolution of supply curves and the price mechanism in time. This concept is based on the contradictory, or at least ambiguous, combination of an ex ante perspective of expectation formation and an ex post inertial dynamics. The author first explores the ex ante side of the contradiction by drawing upon the writings of Shackle. Subsequently, he examines Kornai's conception of the normal state as system-specific. The author identifies the relationship between normality and the coordination mechanism in Kornai's ex post approach which may be regarded as an alternative to Shackle's solution. Finally, the pertinence of the Marshallian concept of normality will be demonstrated, as will its divergent developments by Shackle and Kornai. This leads us to the conclusion that a further development of the concept is required in order to reconcile both ex ante and ex post approaches; this might be based on recent evolutionary analysis. Copyright 1998 by Oxford University Press.

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  • Vahabi, Mehrdad, 1998. "The Relevance of the Marshallian Concept of Normality in Interior and Inertial Dynamics as Revisited by Shackle and Kornai," Cambridge Journal of Economics, Oxford University Press, vol. 22(5), pages 547-572, September.
  • Handle: RePEc:oup:cambje:v:22:y:1998:i:5:p:547-72
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    Cited by:

    1. Mehrdad Vahabi, 2001. "The Soft Budget Constraint: A Theoretical Clarification," Post-Print hal-00629160, HAL.
    2. Mehrdad Vahabi, 2017. "Janos Kornai and General Equilibrium Theory," CEPN Working Papers hal-01583569, HAL.
    3. Vahabi, Mehrdad, 2009. "Normal Value," MPRA Paper 69388, University Library of Munich, Germany.
    4. Vahabi, Mehrdad, 1997. "De l’économie de la pénurie à l’économie politique du communisme. Sur l’évolution récente de la pensée économique de Janos Kornai : 1980-1996
      [Economics of Shortage and Political Economy of Communi
      ," MPRA Paper 80026, University Library of Munich, Germany, revised 1997.
    5. Vahabi, Mehrdad, 2002. "The Soft Budget Constraint: An Institutionalist Approach," MPRA Paper 17649, University Library of Munich, Germany.

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