1 - Introduction: Disequilibrium analysis and the theory of value
Published online by Cambridge University Press: 05 January 2013
Summary
Introduction
Economists, particularly economic theorists, are most often concerned with the analysis of positions of equilibrium. This is most obviously true in microeconomics, where general equilibrium theory stands as the most complex achievement of rigorous analysis; but it is becoming true of macroeconomics as well, where it has become increasingly popular in rational expectations models to assume that markets always clear.
Less attention is given to disequilibrium. In microeconomics, the subject of the stability of general equilibrium is in poor repute. Too many economists (including economic theorists, who should know better) apparently believe that stability theory means tâtonnement - a branch of the subject that died in 1960 and was long ago superseded.1 They regard it as overformal and empty of results, save under the most extreme ad hoc restrictions, and without much relation to the rich and complex world of real economies.
For macrotheorists the concentration on equilibrium manifests itself in other ways. Aside from the rational-expectations-market-clearing position already mentioned, one currently fashionable branch of the subject investigates fixed-price, quantity-constrained equilibria. Such investigations can be very fruitful, but they are not truly disequilibrium investigations, although they are sometimes misnamed as such. They are analyses of equilibria that are non-Walrasian.
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- Disequilibrium Foundations of Equilibrium Economics , pp. 1 - 16Publisher: Cambridge University PressPrint publication year: 1983