The Flawed Foundations of General Equilibrium Theory: Critical Essays on Economic Theory

by Ackerman; Frank

• ISBN13: 9780415700016
• ISBN10: 0415700019
• Format: Hardcover
• Copyright: 2004-08-24
• Publisher: Routledge

Summary

Does economic theory, and its many practical applications, rest on concrete foundations? Given the influence and prestige afforded to orthodox economic policy advice, apparently the answer is a resounding "yes". Economists Frank Ackerman and Alejandro Nadal present a fundamental challenge to this received wisdom, demonstrating that neither the abstractions of general equilibrium nor their real-world consequences, stand up to logical scrutiny. Themes critically analyzed in this book include: * Economics' assumptions about consumer behavior * Individual choices and the role of money * The Application of economic theory to current debates in globalization, trade and development. The Flawed Foundations of General Equilibrium Theoryshows that there are fatal flaws in the standard theoretical model of a market economy. As such it will be an enlightening read for economists throughout the world of all persuasions.

Table of Contents

List of contributors	xiii
Acknowledgments	xiv
Introduction: underneath the flawed foundations	1	(167)
FRANK ACKERMAN AND ALEJANDRO NADAL
1 Still dead after all these years: interpreting the failure of general equilibrium theory	14	(19)
FRANK ACKERMAN
2 Behind the building blocks: commodities and individuals in general equilibrium theory	33	(15)
ALEJANDRO NADAL
3 Money and prices: the limits of the general equilibrium theory	48	(20)
CARLO BENETTI
4 The law of supply and demand in the proof of existence of general competitive equilibrium	68	(18)
CARLO BENETTI, ALEJANDRO NADAL, AND CARLOS SALAS
5 Consumed in theory: alternative perspectives on the economics of consumption	86	(13)
FRANK ACKERMAN
6 Choice of technique revisited: a critical review of the theoretical underpinnings	99	(17)
ALEJANDRO NADAL
7 Existence values and priceless externalities	116	(16)
FRANK ACKERMAN
8 Contradictions of the open economy model as applied in Mexico	132	(17)
ALEJANDRO NADAL
9 An offer you can't refuse: free trade, globalization, and the search for alternatives	149	(19)
FRANK ACKERMAN
10 Computable abstraction: general equilibrium models of trade and environment	168	(13)
FRANK ACKERMAN AND KEVIN P. GALLAGHER
11 Freedom and submission: individuals and the invisible hand	181	(21)
ALEJANDRO NADAL
References	202	(14)
Index	216