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WHAT A DIFFERENCE A SUM (∑) MAKES: SUCCESS AND FAILURE IN THE RATIONALIZATION OF DEMAND

Published online by Cambridge University Press:  13 August 2012

Abstract

This paper discusses the Sonnenschein–Mantel–Debreu (SMD) theorems in general equilibrium theory. It argues that the SMD results were related to the previous literature on the integrability of demand. The integrability question involved rationalizing individual demand functions, and the SMD theorems asked the same question about aggregate (market) excess demand functions. The paper’s two goals are to demonstrate how the SMD results followed naturally from the earlier work on integrability, and to point out that the profession’s reception was quite different; the integrability results were considered a success story, while the SMD results were quite negative.

Type
Research Articles
Copyright
Copyright © The History of Economics Society 2012

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