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The general equilibrium model in Walras' economic theory

Investigating the process of setting prices by individual entrepreneurs, Walras' predecessor A. Cournot noted the need to take into account the relationships that develop between the prices of individual goods. Only the inclusion of all these connections in the sphere of analysis can provide a sufficiently complete and rigorous solution to the problem. But, as Cournot stipulated, "this would exceed the capabilities of mathematical analysis and calculation methods." Cournot pointed out the need for an analytical system that could take into account the diverse connections that develop between different sectors of the economy. It is precisely this model — the general equilibrium model — that has been at the center of Walras' research.

Nevertheless, the marginalist interpretation of the pricing process did not play any significant role in the construction of the general equilibrium model. The English historian of economic doctrines T. Hutchison noted: "If the pressure of criticism forced him to change the wording, he could state his theoretical system without using the category of utility." In a letter to his student V. Pareto, Walras condemned the approach of Menger, Boehm-Bawerk and other representatives of the Austrian school, who identified the demand curve with the utility curve, and emphasized that in his concept demand is always a function of many variables.

The general equilibrium model was distinguished primarily by the breadth of coverage of economic processes: this method involved the study of diverse connections between different cells of a complex economic structure.

Both the formal apparatus used in the Walras model and the conclusions about the existence of vectors of equilibrium non-negative prices and outputs look somewhat naive today (as is known, the equality of the number of equations and the number of unknowns does not always provide sufficient conditions for the existence of such solutions). Nevertheless, it was undoubtedly an important step in the development of economic theory. For the first time in Western academic theory, the French economist tried to more or less strictly raise the question of the general equilibrium of the economic system, and the system of equations included (at least in the general formulation) an extensive range of interdependencies. Thus, the size of the supply of final products depends on a number of values: the price of the product in question, the prices of other goods, production costs, etc. Such an approach has significantly expanded the understanding of objective factors influencing the formation of economic equilibrium. Free money in the non gamstop no deposit bonus is one of the main advantages when it comes to great deals in a casino. For beginners, a no deposit bonus is that you get a certain amount just for registering an account. You can read more about bonuses on our website bestbonusmoney.com/non-gamstop-no-deposit-bonus . Few players, especially slot machine enthusiasts, choose free spins to increase their potential winnings. Just like bonus money, it can be provided as part of a bonus
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