Last week I reposted a revised version of a blogpost from last November, which was a revised section from my paper “Between Walras and Marshall: Menger’s Third Way.” That paper was presented at a conference in September 2021 marking the 100th anniversary of Menger’s death. I have now completed my revision of the entire paper, and the new version is now posted on SSRN.
Here is the link to the new version, and here is the abstract of the paper:
Neoclassical economics is bifurcated between Marshall’s partial-equilibrium and Walras’s general-equilibrium. Neoclassical theory having failed to explain the Great Depression, Keynes proposed a theory of involuntary unemployment, later subsumed under the neoclassical synthesis of Keynesian and Walrasian theories. Lacking suitable microfoundations, that synthesis collapsed. But Walrasian theory provides no account of how equilibrium is achieved. Marshallian partial-equilibrium analysis offered a more plausible account of how general equilibrium is reached. But presuming that all markets, but the one being analyzed, are already in equilibrium, Marshallian partial equilibrium, like Walrasian general equilibrium, begs the question of how equilibrium is attained. A Mengerian approach to circumvent this conceptual impasse, relying in part on a critique of Franklin Fisher’s analysis of the stability of general equilibrium, is proposed.
Commnets, criticisms and suggestions are welcomed and encouraged.
