Should Austrians Scorn General-Equilibrium Theory?

Should Austrians Scorn General-Equilibrium Theory? Review of Austrian Economics, 11: 19–30 (1999) ° c 1999 Kluwer Academic Publishers Should Austrians Scorn General-Equilibrium Theory? LELAND B. Y EAGER ustrian economists try to explain how a whole economic system functions. They do not focus narrowly on the circumstances of the individual household or the geometry of the individual firm. They investigate the coordination of the mutually influencing yet separately decided activities of many millions of individual units; they investigate general interdependence. General equilibrium is a somewhat narrower concept. (“GE” is a convenient abbrevia- tion for both “general equilibrium” and, as context requires, general-equilibrium theory or approach.) By GE I mean work by and in the tradition of Leon ´ Walras, Vilfredo Pareto, Gustav Cassel, Gerard Debreu (1959), Robert Kuenne (1963, 1968), Kenneth Arrow and Frank Hahn (1971), and others. Distaste for GE among Austrian economists is familiar, as it was among Chicago economists such as Milton Friedman and George Stigler (who assumed that it somehow stood in rivalry with Marshallian partial-equilibrium analysis). Austrians sometimes state explicit reasons for their scorn, but often they take the reasons as too well known to need repeating. I myself have been accused of a GE mindset in a context that The Review of Austrian Economics Springer Journals

Should Austrians Scorn General-Equilibrium Theory?

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Kluwer Academic Publishers
Copyright © 1999 by Kluwer Academic Publishers
Economics; Public Finance; Political Science; History of Economic Thought/Methodology
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