Title

Alfred Marshall's Cardinal Theory of Value: The Strong Law of Demand

Document Type

Discussion Paper

Publication Date

7-1-2007

CFDP Number

1615R

CFDP Revision Date

2013-07-01

CFDP Pages

7

Abstract

We show that all the fundamental properties of competitive equilibrium in Marshall’s cardinal 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. That is, existence, uniqueness, optimality, and global stability of equilibrium prices with respect to tatonnement price adjustment follow from the cyclical monotonicity of the market demand function in the Marshallian general equilibrium model.

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