General Equilibrium Foundation of Partial Equilibrium Analysis

Authors: Hayashi, Takashi

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  • Bridges the gap between general equilibrium and partial equilibrium analysis
  • Offers a new perspective on applied microeconomics
  • Exposes the flawed teaching of general and partial equilibrium analysis
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  • ISBN 978-3-319-56696-2
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About this book

This book addresses the gaps in undergraduate teaching of partial equilibrium analysis, providing a general equilibrium viewpoint to illustrate the assumptions underlying partial equilibrium welfare analysis. It remains unexplained, at least at the level of general economics teaching, in what sense partial equilibrium analysis is indeed a part of general equilibrium analysis. Partial equilibrium welfare analysis isolates a market for a single commodity from the rest of the economy, presuming that other things remain equal, and measures gains and losses by means of consumer surplus. This is a money metric that is supposed to be summable across individuals, recommending policy that maximizes the social surplus. But what justifies such apparently uni-dimensional practise? Within a general equilibrium framework, the assumption of no income effect is presented as the key condition, and substantive general equilibrium situations in which the condition emerges are presented. The analysis is extended to the case of uncertainty, in which the practice adopts aggregate expected consumer surplus, and scrutinizes when such practice is justified. Finally, the book illustrates partial equilibrium as an institutional artifact, meaning that institutional constraint induces individuals to behave as if they are in partial equilibrium. This volume forms an important contribution to the literature by researching why this disparity persists and the implications for economics education.

About the authors

Takashi Hayashi is Professor in Economics at the Adam Smith Business School, University of Glasgow, Scotland. He works on microeconomic theory, in particular decision theory and welfare economics. He has regularly published articles in scholarly journals such as Econometrica, Journal of Economic Theory and Theoretical Economics.

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Table of contents (8 chapters)

Table of contents (8 chapters)

Buy this book

eBook $84.99
price for USA in USD
  • ISBN 978-3-319-56696-2
  • Digitally watermarked, DRM-free
  • Included format: PDF, EPUB
  • ebooks can be used on all reading devices
  • Immediate eBook download after purchase
Hardcover $119.99
price for USA in USD
  • ISBN 978-3-319-56695-5
  • Free shipping for individuals worldwide
  • Institutional customers should get in touch with their account manager
  • Covid-19 shipping restrictions
  • Usually ready to be dispatched within 3 to 5 business days, if in stock
Softcover $109.99
price for USA in USD
  • ISBN 978-3-319-85975-0
  • Free shipping for individuals worldwide
  • Institutional customers should get in touch with their account manager
  • Covid-19 shipping restrictions
  • Usually ready to be dispatched within 3 to 5 business days, if in stock
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Bibliographic Information

Bibliographic Information
Book Title
General Equilibrium Foundation of Partial Equilibrium Analysis
Authors
Copyright
2017
Publisher
Palgrave Macmillan
Copyright Holder
The Editor(s) (if applicable) and The Author(s)
eBook ISBN
978-3-319-56696-2
DOI
10.1007/978-3-319-56696-2
Hardcover ISBN
978-3-319-56695-5
Softcover ISBN
978-3-319-85975-0
Edition Number
1
Number of Pages
XIV, 185
Number of Illustrations
25 b/w illustrations
Topics