The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Tâtonnement and Recontracting

  • Takashi Negishi
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1353

Abstract

In the current theory of general economic equilibrium, recontracting and tâtonnement (a French word meaning ‘groping’) are used interchangeably to denote a simplifying assumption that no actual transactions, and therefore no production and consumption activities, take place at disequilibria when prices are changed according to the law of supply and demand (Kaldor 1934; Arrow and Hahn 1971, pp. 264, 282). Historically speaking, however, this usage is somewhat confusing, since recontracting is originally due to Edgeworth, who developed it in a direction different from that in which Walras developed his tâtonnement (Walker 1973).

Keywords

Auctioneer Barter Edgeworth, F. Y. Exchange General equilibrium Gross substitutability Hicks, J. R. Kinked demand curve Law of indifference Limit theorem Marshall, A. Money Neutrality of money Non-recontracting models Non-tâtonnement models Numéraire Recontracting Sticky prices Tâtonnement Tâtonnement and recontracting Walras, L. Walras’s Law 

JEL Classifications

D5 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Takashi Negishi
    • 1
  1. 1.