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From Walras’s General Equilibrium to Hicks’s Temporary Equilibrium

Published online by Cambridge University Press:  17 August 2016

Bruna Ingrao
Affiliation:
Università di Sassari
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Summary

Starting by and overview of open problems in the Walrasian heritage, the paper reviews tne debates which paved the way to Hicksian temporary equilibrium. In the late twenties and the thirties the open issue of equilibrium and business fluctuations gave rise to new research programmes centered on the need to add the time dimension in equilibrium analysis. The crucial result of the equilibrium and time controversy was that the general equilibrium concept cannot be defined unless it is related to a time horizon and to a process of planning over a time horizon. Ideas of intertemporal and temporary equilibrium in the writings of Hayek and Lindhal are examined in close connection with the debate on information and perfect foresight. The paper evaluates the novelty of Value and Capital with respect to the previous Austrian and Swedish contributions, arguing that the temporally equilibrium approach gained a more precise body of theory, but at the same time it lost its more innovative perspective.

Type
Research Article
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1989

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From Walras’s General Equilibrium to Hicks’s Temporary Equilibrium
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