The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Walras’s Law

  • Don Patinkin
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1436

Abstract

Walras’s Law is an expression of the interdependence among the excess-demand equations of a general-equilibrium system that stems from the budget constraint. It is so called because Walras made use of this interdependence from the first edition of his Eléments d’économie politique pure through the fourth, which for all practical purposes is identical with the definitive edition. Walras presents the argument for an exchange economy and extends his analysis to deal first with a simple production economy and then with one in which capital formation also takes place. Here, Walras’s Law is derived in a more general way than usual.

Keywords

Barter Dual decision hypothesis Excess demand and supply General equilibrium Hicks, J. R. Keynes, J. M. Kinked demand curve Kinked supply curve Lange, O. R. Liquidity preference Loanable funds Modigliani, F. Patinkin, D. Perfect competition Price rigidity Real-balance effect Ricardo, D. Say, J.-B. Say’s Law Tâtonnement Wage rigidity Walras’s law 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Don Patinkin
    • 1
  1. 1.