COWLES FOUNDATION FOR RESEARCH IN
ECONOMICS Box 208281
COWLES FOUNDATION DISCUSSION PAPER NO. 1615 Marshall's Theory of Value and the Strong Law of Demand Donald J. Brown and Caterina Calsamiglia July 2007 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. |
