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Walras's law is a consequence of finite budgets. If a consumer spends more on good A then they must spend and therefore demand less of good B, reducing B's price. The sum of the values of excess demands across all markets must equal zero, whether or not the economy is in a general equilibrium.
Acceptability is an amorphous concept, being both highly subjective and circumstantial; a thing may be acceptable to one evaluator and unacceptable to another, or unacceptable for one purpose but acceptable for another. Furthermore, acceptability is not necessarily a logical or consistent exercise.
Walras is best known for his book Éléments d'économie politique pure, a work that has contributed greatly to the mathematization of economics through the concept of general equilibrium. [5] The definition of the role of the entrepreneur found in it was also taken up and amplified by Joseph Schumpeter.
The Overton window is an approach to identifying the ideas that define the spectrum of acceptability of governmental policies. The premise of the concept Overton defined was that politicians typically act freely only within a window seen as acceptable.
Law and economics, or economic analysis of law, is the application of microeconomic theory to the analysis of law. The field emerged in the United States during the early 1960s, primarily from the work of scholars from the Chicago school of economics such as Aaron Director , George Stigler , and Ronald Coase .
Public interest theory is a part of welfare economics. It emphasizes that regulation should maximize social welfare and that regulation should follow a cost/benefit analysis to determine whether the increased social welfare outweighs the regulatory cost. The following costs can be distinguished: [citation needed] Formulation and implementation ...
Positive economics is commonly deemed necessary for the ranking of economic policies or outcomes as to acceptability. [ 14 ] By contrast, Friedman in an influential 1953 essay emphasized that positive and normative economics could never be entirely separated, because of their relationship with economic policy.
The General Theory of Employment, Interest and Money is a book by English economist John Maynard Keynes published in February 1936. It caused a profound shift in economic thought, [1] giving macroeconomics a central place in economic theory and contributing much of its terminology [2] – the "Keynesian Revolution". It had equally powerful ...