Walras' ideas and practical applications

Walras' ideas, it would seem, are reliably protected from accusations of hermetic isolation, in the development of "art for art's sake": the influence of his schemes and, in particular, the assumption about the constancy of technological coefficients (in the above equations) is not difficult to trace in fruitful statistical research, for example, in the analysis of the intersectoral balance.

But in this case, M. Friedman seems to have certain grounds to assert that input-output research "was not a further development of Walras' pure economic theory." According to Friedman, in this case, we can rather talk about improving those computational procedures of applied economic analysis, which Cournot wrote about. Research on the intersectoral balance, of course, was based on the fruitful ideas of Walras. Nevertheless, the appearance of such studies marked at least a partial break with the axiomatic approach and a transition to the path of interpretation and "insufficiently rigorous" (from the point of view of this approach) empirical analysis.

The more artificial and complex formal logical constructions become within the framework of general equilibrium models, the more appropriate sarcastic remarks about pure economic theory seem (the Arrow—Debray model is much more important than the Walras model, and the reproach is that it "hardly gives anything but confidence in However, the development of methods of rigorous formal and logical analysis within the framework of economic theory makes it inevitable to use an axiomatic approach. And just as inevitable is the inherent tendency in the axiomatic approach itself to fly away from real problems into the world of "pure" formal logical structures. In this regard, it should be recalled that Walras himself proceeded from the need for an organic combination of the results of pure economic theory with applied and social theory. Pure economic theory, in his opinion, should still address reality, but only after purely scientific research is completed — it is at this stage that the possibility of practical applications appears.

A comparison of Walras' book with the works of modern Western authors makes it possible to reveal in more detail the process of gradual substantial impoverishment of the initial schemes of general equilibrium. Walras noted, for example, that in real life, competitive equalization of the rate of return on new investments can only be carried out gradually. Financial markets play a crucial role in this alignment. However, modern models of general equilibrium do not allow us to single out the special role of capital markets in the mechanism of establishing equilibrium economic proportions: the theory of general equilibrium is still insufficiently integrated with modern capital theory. For a flawless gaming experience, visit smooth-spins-casino.com . Play your favorite slots and table games with total confidence, thanks to advanced encryption and quick payouts. Smooth Spins offers everything you need for safe and fun online gambling.