IDEAS home Printed from https://ideas.repec.org/p/jmp/jm2018/ple904.html
   My bibliography  Save this paper

The Relativity Theory of General Economic Equilibrium

Author

Listed:
  • Paata Leiashvily

Abstract

Purpose. The purpose of this paper is to propose a new approach to the understanding of self-regulation mechanism of decentralized economic system. Design/methodology/approach. As a result of the dialectical analysis of fundamental economic categories of market economy it appears as the form of a complex, non-linear, functionally closed and causally open system of economic actions. These systems have a number of unique properties that are well studied by second-order cybernetics. This allows in the study of economic processes the unique research and development of this science to be involved in the interdisciplinary format. Findings. The self-organization of a market economy is carried out through the recursive processes. Recursive processes in the economic system, as well as in other complex nonlinear dynamical systems, generate "eigenvalues" ("fixed points"). These "eigenvalues" are the equilibrium prices to which through the recursive processes tend the actual market prices, thus providing a tendency of the system to the general equilibrium. However, due to constant influence on the system of random external factors, the general equilibrium is never achieved. Research limitations/implications. On the base of the created model the hidden relationships among the gross profit, gross saving, gross investment and gross consumption in debt, as well as the relationships among the other economic parameters are revealed. This is important for adequate understanding of economic reproduction, tendency to general equilibrium, genesis of economic cycles, etc. Practical implications. The proposed understanding of self-regulation mechanism of decentralized economic system will help to improve the applied economic models and to develop the effective economic policy. Originality/value. The original interpretation of economic self-regulation mechanism of market economy is given. The âSymmetrical modelâ of general economic equilibrium, which shows how economic forces arise, where they are directed and how interact with each other, which provide the homeostasis of a decentralized economic system, is proposed. This model shows the attractor of a real disequilibrium economy. Keywords Market economy, Dialectics, Second-order cybernetics, Economic equilibrium, Closeness, Recursive processes

Suggested Citation

  • Paata Leiashvily, 2018. "The Relativity Theory of General Economic Equilibrium," 2018 Papers ple904, Job Market Papers.
  • Handle: RePEc:jmp:jm2018:ple904
    as

    Download full text from publisher

    File URL: https://ideas.repec.org/jmp/2018/ple904.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Adair Turner, 2015. "Between Debt and the Devil: Money, Credit, and Fixing Global Finance," Economics Books, Princeton University Press, edition 1, number 10546.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Leiashvily, Paata, 2018. "Рождение Макроэкономического Порядка Из Микроэкономического Хаоса
      [The birth of a macroeconomic order from microeconomic chaos]
      ," MPRA Paper 88364, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jmp:jm2018:ple904. 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: (Christian Zimmermann). General contact details of provider: https://ideas.repec.org/jmp.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.