This essay poses Walras＇s theory of price mechanism in its merits and limitations. Walras proposed two laws as conditions for general equilibrium, namely： （1） the law of the variation of equilibrium prices, a subj...This essay poses Walras＇s theory of price mechanism in its merits and limitations. Walras proposed two laws as conditions for general equilibrium, namely： （1） the law of the variation of equilibrium prices, a subjective condition; and （2） the law of the establishment of equilibrium prices, an objective condition. Walras jointed both laws in order to develop his law of supply and demand. This paper offers a formal Walrasian approximation in terms of the Lyapounov＇s function, taking the diagonal dominant hypothesis as departure point, rediscovered almost a century after it was originally proposed by Walras. The paper concludes with critical reflection concerning the idea of equilibrium economics as medium of social cohesion.展开更多
文摘This essay poses Walras＇s theory of price mechanism in its merits and limitations. Walras proposed two laws as conditions for general equilibrium, namely： （1） the law of the variation of equilibrium prices, a subjective condition; and （2） the law of the establishment of equilibrium prices, an objective condition. Walras jointed both laws in order to develop his law of supply and demand. This paper offers a formal Walrasian approximation in terms of the Lyapounov＇s function, taking the diagonal dominant hypothesis as departure point, rediscovered almost a century after it was originally proposed by Walras. The paper concludes with critical reflection concerning the idea of equilibrium economics as medium of social cohesion.
