Economics Dictionary of ArgumentsHome
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| Equilibrium: In physics, equilibrium is a state in which the forces acting on an object or system are balanced. This means that the net force is zero, and the object or system is not accelerating. The concept helps to understand how objects and systems behave. It is also used in engineering, chemistry, and economics._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Joan Robinson on Equilibrium - Dictionary of Arguments
Harcourt I 22 Equilibrium/RobinsonVsNeoclassical Economics/Robinson/Harcourt: the concept as defined by Joan Robinson,[is] a concept which she contrasts strongly with that of 'the neoclassical economist' whose concept she regards as containing 'a profound methodological error . . . which makes the major part of [the] neoclassical doctrine spurious' (Robinson [1953-4](1), p. 84). Def equilibrium/Robinson: (…) a situation in which expectations are fulfilled so that a given rate of profits has long been ruling and is confidently expected to continue to do so in the future. Harcourt: This definition overcomes the 'puzzles which arise because there is a gap in time between investing money capital and receiving money profits [and] in that gap events may occur which alter [in an unforeseen way] the value of money'. Idealization: Implicit in the definition are assumptions of perfect foresight and lack of uncertainty, the removal of which, Solow considers, has far more serious consequences for the neoclassical theory of capital than any puzzles associated with measuring 'it' or 'its' marginal product (see Solow [1963a](2), pp. 12-14). Harcourt I 23 Uncertainty/Robinson: „To abstract from uncertainty means to postulate that no such (unforeseen) events occur, so that the ex ante expectations which govern the actions of the man of deeds are never out of gear with the ex post experience which governs the pronouncements of the man of words [unless he is an accountant], and to say that equilibrium obtains is to say that no such events have occurred for some time, or are thought liable to occur in the future.“ (Robinson [1953-4](1), p. 84.) >Equilibrium/Neoclassical economics. RobinsonVsNeoclassical economics: (…) an economy cannot get into a position of equilibrium - either it is in one and has been for a long time, or it is not.* If it is in equilibrium, a given item of capital equipment has the same value whether it be valued at its expected future earnings discounted back to the present at the ruling rate of profits, or as work done in order to produce it, cumulated forward to the present at the ruling rate of profits (supposing, for the moment, that equipment is made by labour alone). Rate of profits/capital/investments: Moreover (…) the rate of profits on capital has a definite meaning and is equal to the expected rate of profits on investment. Complication: With more sophisticated techniques whereby durable capital goods help to make capital goods (and/or circulating ones also help), we have to use a more complicated model in which there are balanced stocks of durable capital goods. Formalization: Used capital goods are treated as one-year-older goods {jointly produced with consumption goods), in order to avoid the puzzle of tracing productive inputs back to the Garden of Eden. >Production function/Robinson, >Labour time/Robinson, >Aggregate production function/Robinson. * This definition of equilibrium includes the analysis in the theory of economic growth which is associated with the concept of Golden Ages - steady-state, long-run equili- brium growth paths. For a thorough account of this branch of the modern theory of economic growth, see Hahn and Matthews [1964](3), part 1. 1. Robinson, Joan (1953-4). 'The Production Function and the Theory of Capital', Review of Economic Studies, xxi, pp. 81-106. 2. Solow, Robert M. [1963a] (Professor Dr. F. De Vries Lectures, 1963) Capital Theory and the Rate of Return (Amsterdam: North-Holland). 3. Hahn, F. H. and Matthews, R. C. O. [1964] 'The Theory of Economic Growth: A Survey', Economic Journal, LXXIV, pp. 779-902._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
EconRobin I James A. Robinson James A. Acemoglu Why nations fail. The origins of power, prosperity, and poverty New York 2012 Robinson I Jan Robinson An Essay on Marxian Economics London 1947 Harcourt I Geoffrey C. Harcourt Some Cambridge controversies in the theory of capital Cambridge 1972 |
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