A micro foundational episode of the early history of macroeconomics: a 1932 debate on Walrasian economics and multiple equilibria

Michaël Assous (1) , Vincent Carret (2)

1 TRIANGLE - Triangle : action, discours, pensée politique et économique
2 Creighton University

This paper documents an early fork in the development of macroeconomics, by examining a debate between the Dutch economists Jan Tinbergen and Johan Koopmans. In a 1932 paper, Tinbergen argued that two firms could be stuck in a "bad" equilibrium in the absence of a coordinated action to increase employment. Koopmans replied with a paper demonstrating that multiple equilibria in an exchange economy could not be ranked on the basis of their productive efficiency. This debate contributed to a larger turn away from dynamizing the general equilibrium model, towards the new field of macrodynamics, with long-ranging consequences for the field.

Mots clés: coordination; Jan Tinbergen; multiple equilibria; macroeconomics; general equilibrium

Domaines: Economies et finances

Michaël Assous, Vincent Carret. A micro foundational episode of the early history of macroeconomics: a 1932 debate on Walrasian economics and multiple equilibria. 2023. ⟨hal-04360311⟩