A Reflection on Postwar Neoclassical Economics: The Shift from General Equilibrium Theory to the New Microeconomic Theories

The theoretical focus of neoclassical economics experienced a significant change in the 1970s–1980s. General equilibrium theory lost its dominant position in theoretical economic studies, with its role of setting the research agenda taken over by what this article calls the “new microeconomic theories,” principally decision theory, game theory, and mechanism design. Mainstream economists, post-Keynesians, and historians of economic thought each give a different explanation of the hows and whys of that change, but all miss some critical methodological implications. That change, as this article discusses, shows that neoclassical economics has turned from “grand theory” toward “small models” with empirically delimited utility and that the ideology of marketism lacks a valid scientific foundation. This interpretation can help illuminate the deeper dynamics of the postwar development of neoclassical economics and provide insights for a new political economy that can come to grips with political-economic practices that cannot be fully grasped by the neoclassical tradition.

Walrasian equilibrium theory with and without free-disposal: theorems and counterexamples in an infinite-agent context

This paper provides four theorems on the existence of a free-disposal equilibrium in a Walrasian economy: the first with an arbitrary set of agents with compact consumption sets, the next highlighting the trade-offs involved in the relaxation of the compactness assumption, and the last two with a countable set of agents endowed with a weighting structure. The results generalize theorems in the antecedent literature pioneered by Shafer–Sonnenschein in 1975, and currently in the form taken in He–Yannelis 2016. The paper also provides counterexamples to the existence of non-free-disposal equilibrium in cases of both a countable set of agents and an atomless measure space of agents. One of the examples is related to one Chiaki Hara presented in 2005. The examples are of interest because they satisfy all the hypotheses of Shafer’s 1976 result on the existence of a non-free-disposal equilibrium, except for the assumption of a finite set of agents. The work builds on recent work of the authors on abstract economies, and contributes to the ongoing discussion on the modelling of “large” societies.

Mechanics of floating bodies

We introduce and study the mechanical system which describes the dynamics and statics of rigid bodies of constant density floating in a calm incompressible fluid. Since much of the standard equilibrium theory, starting with Archimedes, allows bodies with vertices and edges, we assume the bodies to be convex and take care not to assume more regularity than that implied by convexity. One main result is the (Lyapunov) stability of equilibria satisfying a condition equivalent to the standard ‘metacentric’ criterion.

HUMAN DEVELOPMENT INDEX AND LITERACY: BALANCE OF EDUCATION QUALITY WITH EQULIBRIUM THEORY

In the current era of globalization, competition between countries is getting stronger and is determined by the quality of their human resources. One of the benchmarks is the Human Development and Literacy Index. The better the HDI number, the better the quality of the country's human resources, thus also literacy rate. However, the country of Indonesia, which is so vast and consists of thousands of islands, leaves a serious problem, namely the high inequality of HDI figures and the low numbers literacy of the people.This paper offers a discussion and a solution for increasing the development of Human Resources and Literacy with equilibrium theory in microeconomics, to overcome inequality which is currently a serious problem. This is of course in accordance with the constitutional mandate of "Social Justice for All Indonesian People" as a reference paper based on authoritative literature with social, economic and educational analysis.Key word : Human Development Index, Literacy, Equlibrium Theory