By Jonathan Newman
Equilibrium is an imaginary construct that should be used only for analytical purposes. Unfortunately, mainstream economists have claimed it should represent a desired state of economic affairs. Austrian economists know better.
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69 sats \ 1 reply \ @SimpleStacker 25 Nov
I'm not familiar with these different concepts, but I would have described the concept of equilibrium as the state that the economic system will tend towards, given the incentives involved. Whether or not it is ever "reached" seems like too imprecise of a statement to even say yes or no to, since the model itself is a simplification of reality
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30 sats \ 0 replies \ @Undisciplined OP 25 Nov
One of my grad school friends was of the view that we are always in equilibrium and it only seems like we aren't because the model is incomplete.
There's definitely room for lots of different interpretations.
I think of it as the arrangement with no remaining unilateral improvements, which is just a different way of saying what you did.
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119 sats \ 1 reply \ @0xbitcoiner 25 Nov
Equilibrium is instant. You ain't gonna find it medium/long-term since the forces (supply and demand) are always moving.
Is this right?
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44 sats \ 0 replies \ @Undisciplined OP 25 Nov
Actually, the opposite is closer to right, although it's not that straightforward.
The way we usually imagine it is to halt any further technological developments or resource discoveries (i.e. take the world as it currently is), then allow market profit and loss processes to play out until the economy settles into a stable pattern of exchange (everyone's age stays fixed too).
You could also just imagine it as being that final state, where there are no remaining welfare improving changes to be made. Maybe that's what you meant by it being an instant.
It's either a hypothetical instant or the limit that market processes are approaching.
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