Traverse Again: The Austrian Method

John Hicks

in Methods of Dynamic Economics

Published in print October 1987 | ISBN: 9780198772873
Published online November 2003 | e-ISBN: 9780191596438 | DOI:
 Traverse Again: The Austrian Method

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This chapter considers a method that is concerned with structure, with structural rigidities, and with Traverse; but the rigidities which it emphasizes are different from its predecessor. When the former method was being looked at by itself, we did not need a name for it; but now that we are to have another which is to be contrasted with it, both must be named. Each, it so happens, can be named from its ancestry. There already existed, at the end of the 19th century, two alternative ways of modelling a whole economy: the general equilibrium of Walras, and the intertemporal method of the Austrian school, whose leader on this matter was Böhm–Bawerk. The requirement equations on which the former method was based used the coefficients of production of Walras: they were questions of a type that was used by Walras, so the method may be labelled as Walrasian. The chapter describes a method similarly descended from the Austrian.

Keywords: Traverse; economic theory; Walras; Austrian theory; Böhm–Bawerk

Chapter.  6636 words.  Illustrated.

Subjects: Macroeconomics and Monetary Economics

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