Book contents
- Frontmatter
- Contents
- List of figures
- Preface
- Acknowledgments
- Introduction
- Part I The models of the mature phase
- Part II The models of the phase of decline
- 15 The structure of the barter model of written pledges markets
- 16 Disequilibrium features of the barter model of written pledges markets
- 17 The written pledges markets in the last comprehensive model
- 18 The markets for circulating capital and money in the last comprehensive model.
- 19 Conclusion
- References
- Collation of editions of the Eléments
- Index
18 - The markets for circulating capital and money in the last comprehensive model.
Published online by Cambridge University Press: 05 May 2010
- Frontmatter
- Contents
- List of figures
- Preface
- Acknowledgments
- Introduction
- Part I The models of the mature phase
- Part II The models of the phase of decline
- 15 The structure of the barter model of written pledges markets
- 16 Disequilibrium features of the barter model of written pledges markets
- 17 The written pledges markets in the last comprehensive model
- 18 The markets for circulating capital and money in the last comprehensive model.
- 19 Conclusion
- References
- Collation of editions of the Eléments
- Index
Summary
This chapter explains and evaluates Walras's treatment of markets for circulating capital and money in his last comprehensive model, and evaluates the model as a whole. It is shown that although he assumed that written pledges are used in the markets for certain commodities to eliminate disequilibrium transactions and production, he also assumed, regarding many of precisely the same commodities, that disequilibrium transactions and production occur in their markets. Moreover, he made the redundant and illogical assumption that there are markets for the services of nondurable goods as well as for the goods themselves. For those and for other reasons, it is concluded that the resulting model is not a functioning system.
Introduction
Circulating capital and money included in the last comprehensive model
It was explained in chapter 17 that the term “Walras's last comprehensive model” is used because he represented the various markets he mentioned in lessons 29 and 30 as being parts of a single whole. With reference to the submodels discussed in this chapter, he contended that he had introduced
the rigorous equations of desired money balances and of circulating physical capital into the system of general equilibrium. I have thus completely finished static economics: that is to say, I have completely solved the problem that consists in using as a point of departure given utilities and given quantities possessed of all the species of wealth by a certain number of exchangers, to establish rationally a complete equilibrium of economic society at a given moment (Walras to Hermann Laurent, March 24, 1899, in 1965, 3, letter 1396, p. 66).
- Type
- Chapter
- Information
- Walras's Market Models , pp. 397 - 419Publisher: Cambridge University PressPrint publication year: 1996