This book
uncovers and
resolves an
inconsistency in
economic theory. More precisely, it
uncovers and
resolves an inconsistency that is hidden within orthodox theoretical price systems. This inconsistency arises because an aspect to the behavior of individuals and firms is missing from the systems.
Price systems are based on demand and supply functions which are intended to reflect the behavior of individuals and firms. These functions, in orthodox price systems, are then constrained to reflect the different forms of behavior of individual systems.
However, the orthodox-type functions do not reflect how behavior in all price systems, irrespective of the different forms of behavior of particular systems, must necessarily be behavior that is subject to limitation in resources.
Consequently, since all price systems must be subject to limitation in resources, there is some means, other than the behavior or the economic rationale of the systems, that ensures that the systems are subject to limitation in resources.
This, as the book shows, is through the mathematics of the systems coming into the picture to ensure that the systems are subject to limitation in resources. This happens as a result of the systems being made mathematically consistent.
Hence consistency of orthodox price systems with limited resources, which should be ensured by the behavior or economic rationale of the systems, is ensured by the systems' mathematics.
This means that the basis of the general economic logic of orthodox price systems, meaning consistency of the systems with limited resources, is mathematical rather than economic.
However, the book resolves this inconsistency, which leads to a more general approach to price systems compared to the orthodox approach. This is reflected in many ways, for example, in the new approach to price systems integrating microeconomic and macroeconomic systems, systems which are dichotomized in the literature..
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