Marshall's Theory of Value and the Strong Law of Demand

9 Pages Posted: 29 Jun 2007

See all articles by Donald Brown

Donald Brown

Yale University - Cowles Foundation

Caterina Calsamiglia

Yale University - Department of Economics

Date Written: July 2007

Abstract

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

Keywords: Partial equilibrium analysis, Short run equilibrium, Strong law of demand, Cyclical monotonicity, Legendre-Frenchel duality

JEL Classification: B13, C62, D11, D51

Suggested Citation

Brown, Donald J. and Calsamiglia, Caterina, Marshall's Theory of Value and the Strong Law of Demand (July 2007). Cowles Foundation Discussion Paper No. 1615. Available at SSRN: https://ssrn.com/abstract=997290

Donald J. Brown (Contact Author)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States

Caterina Calsamiglia

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

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