Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/219662 
Authors: 
Year of Publication: 
2015
Series/Report no.: 
Institute of Economic Research Working Papers No. 46/2015
Publisher: 
Institute of Economic Research (IER), Toruń
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.
Subjects: 
Walras
post-Walras
General Equilibrium Theory
Modern Theory
Unrealistic Assumptions
JEL: 
A1
B2
D5
E4
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.