Marshall’s Tides

Basil John Moore

Chapter 1 in Shaking the Invisible Hand, 2006, pp 3-12 from Palgrave Macmillan

Abstract: Abstract Alfred Marshall discussed the nature of “economic laws” in chapter 3 of his Principles of Economics. He asked: “Why should the ‘laws of economics’ be less predicable and precise in their workings than the laws of physics?” His answer was that economic forces work against a background of hugely complex forces. The most that can be expected of economic analysis is to capture “tendencies” induced by changes in economic variables. An increase in demand implies a “tendency” for prices to rise, ceteris paribus. This states that a rise in prices will occur, providing that none of the complicating factors imprisoned in the ceteris paribus clause work in the opposite direction with sufficient strength to cancel the effect of the increase in demand.

Keywords: Business Cycle; Complex Adaptive System; Probabilistic Scheme; Animal Spirit; Interest Elasticity (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-51213-9_1

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DOI: 10.1057/9780230512139_1

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