The Flawed Foundations of General Equilibrium: Critical Essays on Economic Theory

By Frank Ackerman and Alejandro Nadal
Routledge, June 2004;
Hardcover, 199 Pages; $100

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fundamental flaws in the standard theories of general equilibrium does economic theory rest on solid logical foundations? The influence and prestige afforded to orthodox economics – both as a theory and a source of policy advice – suggests the answer is a resounding “yes.”
Economists Frank Ackerman and Alejandro Nadal, authors of this book, present a funda¬mental challenge to this received wisdom. They demonstrate that neither the abstractions of general equilibrium nor their real-world consequences stand up to logical scrutiny. Themes critically analyzed in this book include:

• conventional economic assumptions about consumer behavior
• individual choices and the role of money
• the application of economic theory to current debates in globalization, trade, and development

The Flawed Foundations of General Equilibrium shows that there are fatal flaws in the standard theoretical model of a market economy. It will be an enlightening read for economists of all persuasions – and for those in law, social sciences, and public policy arenas where economic theory has become inescapable.