From consumer equilibrium for an individual, Value and Capital aggregates to market equilibrium across all individuals, producers, and goods. In so doing, Hicks introduced Walrasian general equilibrium theory to an English-speaking audience. This was the first publication to attempt a rigorous statement of stability conditions for general equilibrium. In doing so, Hicks formalised comparative statics. The book synthesises dynamic-adjustment elements from Walras and Wicksell and from Marshall and Keynes. It distinguishes temporary, intermediate, and long-run equilibrium with expectations as to future market conditions affecting behaviour in current markets (Bliss, 1987, pp. 642–43).
—Wikipedia, Value and Capital, John Richard Hicks, 1939
Michael Spence studied under John Hicks.
We are in original territory. Very smart people, and the smartest people I know, shake their heads in awe of how original Chairman Bernanke’s Quantitative Easing Unlimited is.
The above paragraph is not meant to impress. It is rather to give a window into the rigor that economists work under. Bliss touches on the challenges ACROSS time; the SHIFT from statics to dynamics; and some innate DESIRE for economic, political and social stability.
The chairman has read his Hicks. Alone, he is trying to adjust “behaviour in current markets.” Discuss.