Document Type
Discussion Paper
Publication Date
7-1-2007
CFDP Number
1615
CFDP Pages
8
Abstract
We show that all the fundamental properties of competitive equilibrium in Marshall’s theory of value, as presented in Note XXI of the mathematical appendix to his Principles of Economics (1890), derive from the Strong Law of Demand. This is, existence, uniqueness, optimality, global stability of equilibrium prices with respect to tantonnement price adjustment and refutability follow from the cyclical monotonicity of the market demand function in the Marshallian general equilibrium model.
Recommended Citation
Calsamiglia, Caterina, "Marshall's Theory of Value and the Strong Law of Demand" (2007). Cowles Foundation Discussion Papers. 1911.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/1911