[Home ] [Archive]   [ فارسی ]  
:: Main :: About :: Current Issue :: Search :: Submit ::
Main Menu
Home::
Journal Information::
Articles archive::
For Authors::
For Reviewers::
Registration::
Contact us::
Site Facilities::
::
:: Volume 1, Issue 4 (Quarterly Journal of Fiscal and Economic Policies 2014) ::
qjfep 2014, 1(4): 111-130 Back to browse issues page
The Critique of General Equilibrium Theory in Neoclassical Economics
Ali Zahedtalaban * , Yekta Ashrafi , Mehdi Khodaparast
Abstract:   (21993 Views)
The equilibrium amount and price are main debates of General Equilibrium Theory. One of main features of General Equilibrium Theory is that interactions of economic' units could only done through the price mechanism. General equilibrium theory has several failures, including the possibility of partial non-independent preferences, incomplete and non-transferable choices and non-convex demand and production. Moreover, the uniqueness of the equilibrium theories could only be obtained based on the assumptions which are unacceptable and quite limited. The General Equilibrium Theory has some other failures and limitations such as its limited operation only in the perfect competition setting, pretending to have real assumptions despite the fact that some of them are not, oversized abstraction and generalization, the static nature of its analysis, believing in legendary role and power for the price as the only exogenous variable of the theory. General equilibrium theory’s static nature is its main defect from the institutional school point of view. The institutionalisms believed that there is no definite and general statement for everywhere and everything, because understanding a phenomenon depends on its operation in the past and influence of various institutions, so from this perspective the knowledge is not very important. In view of new institutionalism in spite of positive transaction costs, the price mechanism alone would not lead to efficient allocation of resources and the role of institutions, especially legal regime and property rights in reducing transaction cost, in resource allocation and the need for interdisciplinary studies should be noted.
Keywords: Neoclassical Economics, General Equilibrium, Historical School, Institutionalism.
Full-Text [PDF 389 kb]   (11002 Downloads)    
Type of Study: Research | Subject: Special
Send email to the article author

Add your comments about this article
Your username or Email:

CAPTCHA


XML   Persian Abstract   Print


Download citation:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:

Zahedtalaban A, Ashrafi Y, khodaparast M. The Critique of General Equilibrium Theory in Neoclassical Economics. qjfep 2014; 1 (4) :111-130
URL: http://qjfep.ir/article-1-94-en.html


Rights and permissions
Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Volume 1, Issue 4 (Quarterly Journal of Fiscal and Economic Policies 2014) Back to browse issues page
فصلنامه سیاستهای مالی و اقتصادی Quarterly Journal of Fiscal and Economic Policies
Persian site map - English site map - Created in 0.05 seconds with 37 queries by YEKTAWEB 4645