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The temporary equilibrium method: Hicks against Hicks

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  • Michel De Vroey

Abstract

Hicks is renowned for having introduced the temporary equilibrium framework in his book Value and Capital. Subsequently, however, he partially recanted this framework by rejecting the market clearing idea while still keeping the week device. The aim of this paper is to assess whether this change was right. My answer will be broadly negative. To make my point, I will ponder on the meaning and implications of the week device, assess the validity of Hicks' claim that slow adjustment can cause market rationing, examine his claim that the possibility of market clearing depends on the prevailing market form and, finally, assess his twofold filiations towards Marshall and Walras.

Suggested Citation

  • Michel De Vroey, 2006. "The temporary equilibrium method: Hicks against Hicks," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 13(2), pages 259-278.
    • Handle: RePEc:taf:eujhet:v:13:y:2006:i:2:p:259-278
    DOI: 10.1080/09672560600708318
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    References listed on IDEAS

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    1. De Vroey, Michel, 2001. "Price Rigidity and Market-Clearing: A Conceptual Clarification," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 25(5), pages 639-655, September.
    2. Michel De Vroey, 2000. "Marshall on equilibrium and time: a reconstruction," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 7(2), pages 245-269.
    3. Hicks, John, 2017. "A Market Theory of Money," OUP Catalogue, Oxford University Press, number 9780198796237.
    4. repec:bla:scotjp:v:46:y:1999:i:3:p:319-38 is not listed on IDEAS
    5. Hicks, John, 1977. "Economic Perspectives: Further Essays on Money and Growth," OUP Catalogue, Oxford University Press, number 9780198284079.
    6. Michel De Vroey, 2003. "Perfect information a la Walras versus perfect information a la Marshall," Journal of Economic Methodology, Taylor & Francis Journals, vol. 10(4), pages 465-492.
    7. Hahn, Frank, 1990. "John Hicks the Theorist," Economic Journal, Royal Economic Society, vol. 100(401), pages 539-549, June.
    8. Leijonhufvud, Axel, 1984. "Hicks on Time and Money," Oxford Economic Papers, Oxford University Press, vol. 36(0), pages 26-46, Supplemen.
    9. Grandmont, Jean-Michel, 1993. "Temporary general equilibrium theory," Handbook of Mathematical Economics, in: K. J. Arrow & M.D. Intriligator (ed.), Handbook of Mathematical Economics, edition 4, volume 2, chapter 19, pages 879-922, Elsevier.
    10. J. R. Hicks, 1963. "The Theory of Wages," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-00189-7, December.
    11. Donald A. Walker (ed.), 2000. "Equilibrium," Books, Edward Elgar Publishing, volume 0, number 1585.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Prosperity for All: Coming Soon to a Bookstore Near You
      by Roger Farmer in My Economic Window on 2016-05-06 23:28:00

    Citations

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    Cited by:

    1. Alain Béraud, 2014. "Le développement de la théorie de l'équilibre général. Les apports d'Allais et de Hicks," Revue économique, Presses de Sciences-Po, vol. 65(1), pages 125-158.
    2. Yi-Jang Yu, 2014. "A More Practical Method for Explaining Equilibrium," Research in World Economy, Research in World Economy, Sciedu Press, vol. 5(1), pages 88-98, March.
    3. Roger E.A. Farmer, 2017. "Post-Keynesian dynamic stochastic general equilibrium theory," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 14(2), pages 173-185, September.
    4. Jean-Sébastien Lenfant, 2020. "Great Expectations. Hicks on expectations from Theory of Wages (1932) to Value and Capital (1939) (long version)," GREDEG Working Papers 2020-37, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    5. W D A Bryant, 2009. "General Equilibrium:Theory and Evidence," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 6875, August.
    6. Florentina Xhelili Krasniqi & Rahmie Topxhiu & Donat Rexha, 2016. "The contribution of several Nobel Laureates in the development of the Theory of general economic equilibrium," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 19(62), pages 153-166, December.
    7. Paul Oslington, 2012. "General Equilibrium: Theory and Evidence," The Economic Record, The Economic Society of Australia, vol. 88(282), pages 446-448, September.
    8. Jean-Sébastien Lenfant, 2020. "Great Expectations. Hicks on Expectations from Theory of Wages (1932) to Value and Capital (1939)," Working Papers hal-03183464, HAL.

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    More about this item

    Keywords

    Hicks; temporary equilibrium;

    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General

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