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- W2026173692 abstract "Modern economic theory is predominantly a theory of equilibrium. The question of how such positions of rest, in which all individual plans and expectations match, come about in larger economies is rarely addressed. The discipline has little more to offer on it than the metaphor of the “invisible hand,” the imposed “law of supply and demand,” which says that the prices of goods and services rise when their demand exceeds their supply and fall otherwise until they are equal, or at best formalizations of such price adjustments, carried out by an auctioneer-like central institution with information on aggregate excess demand. The auctioneer model is hardly convincing as an explanation of the majority of market processes in which no such central coordinator is present. By appealing to an outside entity, an “auctioneer,” with no objectives of its own, existing disequilibrium theory is furthermore at odds with the microfoundations of economics. It presupposes a level of coordination, whereas economics’ original research question is whether and how order arises in an unorchestrated society of people making their own individual plans. Moreover, despite this considerable amount of structure, the approach was able to" @default.
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- W2026173692 date "2006-01-01" @default.
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- W2026173692 title "Disequilibrium Dynamics and Aggregate Excess Demand: On a Homunculus Fallacy in Economic Theory" @default.
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- W2026173692 doi "https://doi.org/10.1215/00182702-2005-022" @default.
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