tailieunhanh - History of Economic Analysis part 102

History of Economic Analysis part 102. At the time of his death in 1950, Joseph Schumpeter-one of the major figures in economics during the first half of the 20th century-was working on his monumental History of Economic Analysis. A complete history of humankind's theoretical efforts to understand economic phenomena from ancient Greece to the present, this book is an important contribution to the history of ideas as well as to economics. | History of economic analysis 972 special sense in which it is true to say that in this set-up absolute prices or the price level are Now we ask do these conditions suffice to determine values of these variables This to repeat is the question of the existence in the mathematical sense of a set of values that will satisfy the conditions. This question is synonymous with the question whether the equations embodying the conditions are capable of being simultaneously solved. But it is neither the question whether there is any tendency in our market to establish these solutions if they do exist nor the question whether these solutions or equilibrium values are stable or not. Of all the unjust or even meaningless objections that have been leveled at Walras perhaps the most unjust is that he believed that this existence question is answered as soon as we have counted equations and unknowns and have found that they are equal in number. We have already seen that he made sure of one additional prerequisite independence of equations. But as we analyze his argument we discover further that though his mathematical equipment was no doubt deficient his genius saw or sensed all or almost all the other relevant problems and practically always arrived at correct results. If he failed to answer all questions satisfactorily there was immortal merit in his having posited them. If his work is not the culmination of this type of analysis it certainly is its foundation. He saw the possibility that our system of equations may not admit of any solution at all. He also saw and even proved that the solution if it exist may not be unique. All he claimed was that solutions exist normally and that if the commodities in the market are numerous there will in general be a unique solution Éléments p. 163 . Since in his schema quantities demanded and offered are single-valued functions of the prices and since his marginal utility functions are monotonically decreasing so much may be .