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Consistency and incompleteness in general equilibrium theory

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  • Simone Landini

    (IRES Piemonte)

  • Mauro Gallegati

    (Polytechnic University of Marche)

  • J. Barkley Rosser

    (James Madison University)

Abstract

We consider the implications for general equilibrium theory of the problems of consistency and completeness as shown in the Gödel-Rosser theorems of the 1930s. That a rigorous consistent formal system is incomplete poses serious problems for dealing with unresolved problems in a fully formal system such as general equilibrium theory. We review the underlying mathematical issues and apply them to this problem for general equilibrium theory. We also consider alternative approaches such as agent-based modeling founded on empirically estimated behavioral assumptions for agents that may allow for a better way to model non-equilibrium evolutionary economic dynamics.

Suggested Citation

  • Simone Landini & Mauro Gallegati & J. Barkley Rosser, 2020. "Consistency and incompleteness in general equilibrium theory," Journal of Evolutionary Economics, Springer, vol. 30(1), pages 205-230, January.
    • Handle: RePEc:spr:joevec:v:30:y:2020:i:1:d:10.1007_s00191-018-0580-6
    DOI: 10.1007/s00191-018-0580-6
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    2. Szymon Chudziak, 2022. "On the sources of economic growth, structural consistency of agent-based models and mental-accounting consumer behaviour," KAE Working Papers 2022-073, Warsaw School of Economics, Collegium of Economic Analysis.

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    More about this item

    Keywords

    Axiomatic formal system; Consistency; Incompleteness; Gödel-Rosser’s theorems; General equilibrium theory; Agent-based modeling;
    All these keywords.

    JEL classification:

    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • B3 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • N01 - Economic History - - General - - - Development of the Discipline: Historiographical; Sources and Methods

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