The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Adjustment Processes and Stability

  • Franklin M. Fisher
Reference work entry


Economic theory is pre-eminently a matter of equilibrium analysis. In particular, the centrepiece of the subject – general equilibrium theory – deals with the existence and efficiency properties of competitive equilibrium. Nor is this only an abstract matter. The principal policy insight of economics – that a competitive price system produces desirable results and that government interference will generally lead to an inefficient allocation of resources – rests on the intimate connections between competitive equilibrium and Pareto efficiency.

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Franklin M. Fisher
    • 1
  1. 1.