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Substitutability and the Quest for Stability

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  • Jean-Sébastien Lenfant

    (CLERSÉ - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

Abstract

In this paper, I propose to interpret the history of stability analysis of a Walrasian exchange economy through the lenses of the concept of substitutability. A purely mathematical approach of this story does not seem sufficient to account for the way economists have studied the question of stability and how thay have reacted to the results of this research program. My point is that mathematical constraints kept apart, the concept of substituability has shaped the path followed by stability analysis since the publication of Value and Capital (Hicks, 1939) up to the Sonnenschein-Mantel-Debreu theorems and beyond. Thus, I uphold that firstly, the concept of substitutability allows to catch the heuristic behind the work on stability, and secondly, it allows replacing the importance of SMD results in a broader context, giving a more subtle view of the ups and down of general equilibrium theory as a research program.

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  • Jean-Sébastien Lenfant, 2018. "Substitutability and the Quest for Stability," Working Papers hal-01764115, HAL.
    • Handle: RePEc:hal:wpaper:hal-01764115
    Note: View the original document on HAL open archive server: https://hal.science/hal-01764115
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    References listed on IDEAS

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    8. P. K. Newman, 1959. "Some Notes on Stability Conditions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 27(1), pages 1-9.
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    12. John S. Chipman & Jean-Sébastien Lenfant, 2002. "Slutsky's 1915 Article: How It Came to Be Found and Interpreted," History of Political Economy, Duke University Press, vol. 34(3), pages 553-597, Fall.
    13. Grandmont, Jean-Michel, 1992. "Transformations of the commodity space, behavioral heterogeneity, and the aggregation problem," Journal of Economic Theory, Elsevier, vol. 57(1), pages 1-35.
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    16. Keenan, Donald C., 2001. "Aggregate Substitution Effects Implying Global Stability," Journal of Economic Theory, Elsevier, vol. 101(1), pages 317-329, November.
    17. Oscar Lange, 1940. "Complementarity and Interrelations of Shifts in Demand," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 8(1), pages 58-63.
    18. Saari, Donald G & Simon, Carl P, 1978. "Effective Price Mechanisms," Econometrica, Econometric Society, vol. 46(5), pages 1097-1125, September.
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    Cited by:

    1. 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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    Keywords

    stability; general equilibrium; gross substitutability; substitutability; complementarity; Hicks (John Richard); law of demand; Sonnenschein-Mantel-Debreu; methodology;
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