I don't teach equilibrium theory. I use the demonstration to show what the system cannot converge to equilibrium - because the target moves faster than any possible adjustments.
Michael Perelman Economics Department California State University Chico, CA 95929 530 898 5321 fax 530 898 5901 http://michaelperelman.wordpress.com From: [email protected] [mailto:[email protected]] On Behalf Of Lakshmi Rhone Sent: Tuesday, August 10, 2010 8:40 PM To: [email protected] Subject: [Pen-l] supply and demand But Michael if the "adjustment" process to disequilibrium brings about a new equilibrium price the "adjustment" to which brings about another equilibrium price and so on, then why teach students supply and demand adjustments around a fixed equilibrium at all? And why teach them Sraffian price theory (insofar as it a price theory as opposed to a critique of marginalism)? Aren't economists worried that they are teaching the equivalent of the Aristotelian idea that the natural state to which things tend is rest? Why aren't economists putting the TSSI ideas in their textbooks? LR
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