Title

Marshall's Theory of Value and the Strong Law of Demand

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.

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