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On the notion of equilibrium or the centre of gravitation in economic theory

Author

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  • Ajit Sinha

    (Indira Gandhi Institute of Development Research)

Abstract

This paper is a critical examination of the notion of equilibrium in the classical theory of value. It highlights the theoretical importance as well as the problems associated with the notion of equilibrium in the classical theory and goes on to argue that Sraffa presents a theory of value within the classical tradition that does not require a notion of equilibrium of demand and supply, which succeeds in dissolving the problems associated with the classical theory of value. It also discusses the importance of the notion of equilibrium in the modern general equilibrium theory for the sake of continuity and completeness of the story.

Suggested Citation

  • Ajit Sinha, 2010. "On the notion of equilibrium or the centre of gravitation in economic theory," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2010-008, Indira Gandhi Institute of Development Research, Mumbai, India.
    • Handle: RePEc:ind:igiwpp:2010-008
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    File URL: http://www.igidr.ac.in/pdf/publication/WP-2010-008.pdf
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    References listed on IDEAS

    as
    1. Samuelson, Paul A, 1978. "The Canonical Classical Model of Political Economy," Journal of Economic Literature, American Economic Association, vol. 16(4), pages 1415-1434, December.
    2. Sonnenschein, Hugo, 1972. "Market Excess Demand Functions," Econometrica, Econometric Society, vol. 40(3), pages 549-563, May.
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    JEL classification:

    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • B3 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals
    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches

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