Hicksian Themes on Stability

Frank Hahn

Chapter 3 in Value and Capital: Fifty Years Later, 1991, pp 64-83 from Palgrave Macmillan

Abstract: Abstract Value and Capital (1939) provided the impetus for much of the post-war literature on stability. It was there, as far as I know, that the ‘law of supply and demand’ was, for the first time, studied in a general equilibrium setting. In a pure exchange economy Hicks defined ‘perfect stability’ by the following conditions: A rise in the price of any commodity must make the supply of that commodity exceed the demand (a) if all other prices are given, (b) if some other prices are adjusted so as to preserve equality between demand and supply in their respective markets (c) if all other prices are so adjusted. (Value and Capital p. 248).

Keywords: Demand Curve; Excess Demand; Price Adjustment; Price Vector; Perfect Foresight (search for similar items in EconPapers)
Date: 1991
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DOI: 10.1007/978-1-349-11029-2_4

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