Greatest Happiness Principle in a Complex System: Maximisation versus Driving Force
From philosophical point of view, micro-founded economic theories depart from the principle of the pursuit of the greatest happiness. From mathematical point of view, micro-founded economic theories depart from the utility maximisation program. Though economists are aware of the serious limitations of the equilibrium analysis, they remain in that framework. We show that the maximisation principle, which implies the equilibrium hypothesis, is responsible for this impasse. We formalise the pursuit of the greatest happiness principle by the help of the driving force postulate: the volumes of activities depend on the expected wealth increase. In that case we can get rid of the equilibrium hypothesis and have new insights into economic theory. For example, in what extent standard economic results depend on the equilibrium hypothesis?
Volume (Year): 10 (2012)
Issue (Month): 2 ()
|Contact details of provider:|| |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hellwig, Martin F., 1993. "The challenge of monetary theory," European Economic Review, Elsevier, vol. 37(2-3), pages 215-242, April.
When requesting a correction, please mention this item's handle: RePEc:zna:indecs:v:10:y:2012:i:2:p:103-113. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Josip Stepanic)
If references are entirely missing, you can add them using this form.