The Renewal of Classical General Equilibrium Theory and Complete Input-Output System Models

By Erza Davar

In this book the reader will find not only criticisms of conventional economic theory (general equilibrium (GE) and input-output (I-O)), but also suggestions for how to improve and advance it. The author shows that the Classics' - Smith, Marx and Walras - general equilibrium theories are characterized by a common approach, which has been misunderstood and misinterpreted. The assumptions of modern GE Theory were increased by 'Walras Law' (as formulated by his followers), which claims that the prices of factors (commodities) are equal to zero when there is excess supply. Hence, when compared to reality it is irrelevant. Leontief's attempt to bridge the theoretical (Walrasian) and empirical (Marxian) input-output versions was also incomplete. The author puts forward two new versions of GE Theory and I-O: 1) theoretical, which assumes price discrimination for mixed competition economy and the existence of unemployed factors with significantly positive price; and 2) empirical, which establishes a reciprocal connection between factors and categories of final uses. The suggested approach is demonstrated by practical application.

• Format: Hardcover
• Language: English
• ISBN: 1856286770
• ISBN13: 9781856286770
• Release Date: June 1994
• Publisher: Routledge
• Length: 192 Pages
• Weight: 0.80 lbs.
• Dimensions: 9.0" x 0.8" x 6.5"