X-Nico

unusual facts about general equilibrium theory


General equilibrium theory

Anglo-American economists became more interested in general equilibrium in the late 1920s and 1930s after Piero Sraffa's demonstration that Marshallian economists cannot account for the forces thought to account for the upward-slope of the supply curve for a consumer good.


Criticisms of the labour theory of value

Neoclassical economics also follows this lead  — and that of Jevons, Menger, and Walras — from the 1870s and discards the LTV in favour of general equilibrium theory, which determines prices based on the interaction of preferences, technology and endowments through supply and demand.

John Geanakoplos

Before the Late-2000s financial crisis, Geanakoplos was known primarily for his contributions to General equilibrium theory, particularly Incomplete markets in general equilibrium theory.


see also

DGE

Dynamic stochastic general equilibrium, a branch of applied general equilibrium theory in contemporary macroeconomics