Chapter

The Tendency to Equilibrium

G. B. Richardson

in Information and Investment

Second edition

Published in print July 1997 | ISBN: 9780198292432
Published online November 2003 | e-ISBN: 9780191596810 | DOI: http://dx.doi.org/10.1093/0198292430.003.0001
The Tendency to Equilibrium

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Neo‐classical theory associates a ‘general equilibrium’ with perfectly competitive conditions but fails to demonstrate the existence of any tendency towards its realization. The assumptions of the model, by making it impossible for firms to make informed investment decisions, in fact preclude its attainment.

Keywords: general equilibrium; Marshall; perfect competition; supply curves; Walras

Chapter.  10298 words.  Illustrated.

Subjects: Microeconomics

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