On Walras's Concept of Equilibrium
The view that Walras's equilibrium concept refers to a temporary general equilibrium with stationary expectations has come to be the conventional opinion within the history of economics. This interpretation overlooks salient aspects of Walras's original equilibrium concept: (i) that it refers to a centre of gravitation, thus equilibrium must be assessed together with the adjustment mechanisms that are supposed to bring the economy towards its position of rest; (ii) that it attempts to represent a persistent position of the economic variables; and (iii) that it must not be regarded as a mere artificial model disconnected from reality, but as a device to understand how actual economies work. We therefore conclude that the scope of Walras's work can be better grasped by interpreting his equilibrium system as aiming to describe a long-period position of the economy.
Volume (Year): 25 (2013)
Issue (Month): 1 (January)
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