Walras and pareto on the meaning of the solution concept in general equilibrium theory

The notion of solution plays a crucial role in the conceptual system of Léon Walras, the founder of the General Equilibrium Theory (GET). In this paper, after introducing the two solution concepts employed by Walras in the development of his version of GET, respectively called the "theoretical&...

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Bibliographic Details
Published in:International review of economics 2006-12, Vol.53 (4), p.491-530
Main Author: Donzelli, Franco
Format: Article
Language:English
Subjects:
Economic theory
Equilibrium
Pareto optimum
Studies
Walras, Leon (1834-1910)
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Summary:The notion of solution plays a crucial role in the conceptual system of Léon Walras, the founder of the General Equilibrium Theory (GET). In this paper, after introducing the two solution concepts employed by Walras in the development of his version of GET, respectively called the "theoretical" and the "practical" solution, we discuss the problems such peculiar conception gives rise to, as well as the attempts Walras makes to dodge them. Then we explain why and to what extent Pareto, Walras' immediate successor and co-founder of GET, departs from Walras' original conception, progressively developing an independent viewpoint on the issue of equilibrium computability in GET. (JEL:B13, B21, B31, B41, C62, C68, D50)[PUBLICATION ABSTRACT]
ISSN:1865-1704
1863-4613
DOI:10.1007/BF03029760