What Is Economic Equilibrium?

Economic equilibrium, at least from the perspective of the traditional use of the word, always means a result typically obtained by applying certain inputs, which is in line with the expectations of economic participants. Many theorists, especially those applying the "economy", hypotheses, also require other conditions of equilibrium to enable each participant to achieve the correct expectations of optimization. In any case, the former condition is the correct expectation. Seems to be the basic characteristic of equilibrium, at least when the term is traditionally used. Therefore, the definition of economic equilibrium is different from the definition of physical equilibrium. The pendulum's stationary or amplitude-decreasing state is neither an economic equilibrium nor an economic imbalance, because the pendulum has no expectations.

Economic equilibrium

However, when applying the idea of equilibrium for the first time, it is natural and obvious to regard some kind of stillness as an existing problem in a state of equilibrium. There is no doubt that if equilibrium refers to the "equal" of the thrust and pull of capital or indistinguishable things, the origin of the word is the balance of power that exists when things are at rest. But there may also be a series of positions, each with a new balance. There is no reason to explain. Equilibrium exists only at rest or

in this aspect,

Contrary to the background of economic theory during the two world wars, in Von Neurnann and

therefore,

People have proven from

Grossman once said that in Hicks's work, "perfect foresight is a concept of equilibrium, not a condition of personal reason." A similar argument applies to statistical equilibrium and its variants of rational expectations, which is of greater importance. The economic actors of the equilibrium model are not just rational animals, they also master the knowledge. The assumption of equilibrium raises obvious intellectual questions: Why do people feel that all economic actors have found a real model? How do they manage to estimate and fit this model more and more closely? From Morgan Stern in the 1930s to contemporary Friedman, there has been a series of academic ideas. They believe that if you do not accept assumptions about imbalances, don't expect to understand major events in economic life and daily economic behavior.