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General Equilibrium Theory - Walras versus post-Walras Economists: 'Finding Equilibrium' - Losing Economics

Authors: Ezra Davar;

General Equilibrium Theory - Walras versus post-Walras Economists: 'Finding Equilibrium' - Losing Economics

Abstract

This paper shows that the post-Walras general equilibrium theory is irrelevant to real contemporary economic life. The main achievement of modern General Equilibrium Theory is the proof of equilibrium's existence. It might be that the proof of the equilibrium existence is a mathematical achievement, but the question is whether these proofs are harmonious with the economic situation in reality. This paper traces concisely how Walras's theory has been became causing economic science to deviate in an erroneous direction and reaching a deep crisis; because post-Walras's economists, since Pareto, have misunderstood and misinterpreted Walras's economic theory. This group of Post-Walras authors (Pareto, Cassel, Schlesinger, Wald, and von-Neumann, Hicks, Keynes, Lange, and Patinkin) then recast Walras's theory into incorrect and wrong form; their error further compounded when a later group of economist-mathematicians (Arrow, Debreu, Friedman, Samuelson, Solow and others) accepted their interpretation without reservation. Post-Walras's economists ignore Walras's less known assumptions and blame him for disregarding the problem of equilibrium existence, uniqueness and stability and comparative-static. Therefore, their main objective since the beginning of the 20th century was the rigorous proof of equilibrium existence. However, this proof was based on unrealistic assumptions and along the road the goal of economics was lost. The nine crucial, unrealistic assumptions will be considered and will illustrate that modern general equilibrium theory is irrelevant to real economics and is also far removed from Walras's general equilibrium theory.

Keywords

Unrealistic Assumptions, Modern Theory, ddc:330, General Equilibrium Theory, Walras; post-Walras; General Equilibrium Theory; Modern Theory; Unrealistic Assumptions, A1, B2, post-Walras, E4, Walras, D5, jel: jel:E4, jel: jel:A1, jel: jel:B2, jel: jel:D5

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
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