Co-state variables...

James Devine jdevine at popmail.lmu.edu
Wed May 13 14:23:10 PDT 1998



>Brad De Long wrote:
>>It is at the very least an open question how much is left of the
>>Arrow-Debreu apparatus once the scope of these weasel words is recognized.
>>Does the Arrow-Debreu apparatus cover 50% of what's going on? 30%? 10%? And
>>what happens as the information technology revolution proceeds--and as
>>things of value ("commodities") lose the properties of rivalry and
>>excludibility that underlie all the claims that markets are good allocation
>>mechanisms?
>>I don't know...

Since Arrow-Debreu is a general equilibrium model, if only 1% of the economy doesn't fit the model, the model doesn't work. If you're asking about what percentage of markets approach textbook perfection, that's a more reasonable question.

I came back to lbo-talk because pen-l has been very dry of late. It turns out that lbo-talk is engaged in exactly the same kind of discussion that pen-l has, often with exactly the same people involved. So I think it's reasonable to think that lbo-talk is sucking the life out of pen-l, contrary to Doug's intention.

What is needed is a clear division of labor between the two. (Let's see: pen-l gets the politics and lbo-talk gets the economics? no, that doesn't work...)

in pen-l solidarity,

Jim Devine jdevine at popmail.lmu.edu & http://clawww.lmu.edu/Departments/ECON/jdevine.html "A society is rich when material goods, including capital, are cheap, and human beings dear." -- R.H. Tawney.



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