This book argues that the shift in general equilibrium theory, from its early long-period to the modern very-short-period versions, has had very important consequences which are insufficiently appreciated by large parts of the economics profession. This shift has produced new difficulties, and has undermined central tenets of neoclassical macroeconomic theory (such as the negative dependence of aggregate investment on the interest rate, or the existence of a downward-sloping demand curve for labour) which had their basis in the long-period versions where capital was treated as a single factor. According to the author, what makes it difficult to appreciate these consequences is the current imperfect grasp of the long-period method (an approach common to classical and to the first generations of neoclassical economists, but nowadays often confused with steady-growth analysis). The origins of this problem date back to the 1930s, and to this day still obscure the history and the logic of the neoclassical approach. The book explains the analytical differences between long-period, steady-growth, and short-period general equilibrium analyses, and proves that on this basis considerable clarification can be achieved, not only in many aspects of the history of economic theory, but also in fundamental issues in the theories of value, distribution, capital, investment, employment and money. For example, the reasons for the disagreements in the 'Cambridge controversies' over capital theory become very apparent. This stimulating critique on the present state of economic theory will appeal to academics and researchers with an interest in macroeconomics, the history of economic thought, and the theory of value and distribution. It will also enlighten and inform anyone wanting to understand the reasons behind the current dissatisfaction with neoclassical economics.

In recent years certain leading figures in the world of economics have called the usefulness of general equilibrium theory into question. This superb new book brings together leading economic theorists with important contributions to the ongoing debate. General equilibrium theorists including Michio Morishima, Michael Magill and Martine Quinzii debate strengths, weaknesses and possible futures with leading thinkers such as Herb Gintis, Pierangelo Garegnani and Duncan Foley, who seek to explain the rejection of general equilibrium. Uniquely, none of the contributors portray general equilibrium theory as the perfect guide to market economies actual behaviour, but rather illustrate that there is insufficient acquaintance with existing alternatives and that general equilibrium theory is often used as an ideal 'benchmark'.

This book explores some of the most important themes in neo-Ricardian economics. It explores the many contributions of Pierangelo Garengnani to modern economics, including his work in capital theory, the theory of effective demand and stability analysis. Contributors include Paul Samuelson, John Eatwell, Murray Milgate, Edward Nell, Alessandro Roncaglia and Ian Steedman.

In recent years certain leading figures in the world of economics have called the usefulness of general equilibrium theory into question. This superb new book brings together leading economic theorists with important contributions to the ongoing debate.
General equilibrium theorists including Michio Morishima, Michael Magill and Martine Quinzii debate strengths, weaknesses and possible futures with leading thinkers such as Herb Gintis, Pierangelo Garegnani and Duncan Foley, who seek to explain the rejection of general equilibrium. Uniquely, none of the contributors portray general equilibrium theory as the perfect guide to market economies actual behaviour, but rather illustrate that there is insufficient acquaintance with existing alternatives and that general equilibrium theory is often used as an ideal 'benchmark'.


eBook available with sample pages: 0203217616

Contents:
1. Introduction Gary Mongiovi Part 1. The Critique of Neoclassical Theory 2. Professor Hahn on the 'Neo-Ricardian' Criticism of Neo Classical Economics Fabio Petri 3. Classical and Neoclassical Short-Run Prices: A Comparative Analysis of Their Intended Empirical Content Roberto Ciccone 4. Some Deficiencies of Walrasian General Equilibrium John Eatwell and Murray Milgate Part 2. Classical Political Economy and Its Relation to Marginalism 5. From Utilitarianism to Marginal Utility Alessandro Roncaglia 6. Jacques Savary and the Commerical Knowledge of Commodities Bertram Schefold 7. From Classical Rent Theory to Marginal Productivity Theory: The Works of F.B. Hermanna and J.H. von Thunen Heinz D. Kurz 8. Social Accounting in Adam Smith Fernando Vianello 9. The Notion of Subsistence Wage in Pre-Smithian Classical Political Economy Tony Aspromourgos and Peter Groenewegen 10. Ricardo and the Wages Fund Antonella Stirati 11. The Special Thing I learned from Sraff Paul A. Samuelson Part 3. Accumulation and Technical Change in the Light of the Surplus Approach 12. New and Old Neoclassical Growth Theory: A Critical Assessment Sergio Cesaratto 13. Wicksell after Sraffa: 'Capital Arbitrage' and 'Normal' Rates of Growth, Interest and Profits Edward J. Nell Part 4 Issues in the Theory Production 14. Transferable Machines with Uniform Efficiency Paths Neri Salvadori^n 15. Vertical Integration and 'Reduction to Dated Quantities of Labour Ian Steedman Part 5. The Surplus Approach and Economic Policy 16. High Public Debt and Inflation: On the Disciplinary View of EMU Massimo Pivetti 17. The Government Sector in Post Keynesian Theory of Growth and Personal Distribution Carlo Panico

This textbook explains comprehensively and in rigorous detail not only mainstream microeconomics, but also why many economists are dissatisfied with major aspects of it, and the alternative that they are exploring in response: the Classical-Keynesian-Kaleckian approach. This advanced yet user-friendly book allows readers to grasp the standard theory of consumers, firms, imperfect competition, general equilibrium, uncertainty, games and asymmetric information. Furthermore, it examines the classical approaches to value and income distribution advocated by Adam Smith, David Ricardo and Karl Marx, as well as Post-Keynesian pricing theory, and the microeconomics of variable capacity utilization. Using simple models, it highlights the analytical roots of the important differences between the marginal/neoclassical approach and the classical-Keynesian, critically examining the plausibility and reciprocal consistency of their assumptions. The book also addresses various microeconomic issues not generally included in advanced microeconomics textbooks, including differential land rent, joint-production long-period pricing, capital theory from Walras to the Cambridge debates, the foundations of aggregate production functions, the microeconomics of labor markets, and the long-period theory of wages. Lastly, it presents a unique re-evaluation of welfare economics. Intended for advanced undergraduate and graduate microeconomics courses, this textbook offers a comprehensive introduction to the various approaches and different schools of thought currently competing in the context of economic theory. It can also be used in courses on value and distribution, heterodox economics, and the history of economic analysis. In the present situation, characterized by scientific uncertainty and the co-existence of competing approaches, it will stimulate students to form their own opinion as to which approach appears more promising from a scientific standpoint.