General Competitive Analysis
 
Oil on Canvas
36" x 48"
2004
 
  1. “At a rudimentary level, equilibrium is best considered as a portmanteau concept embodying the simple idea of determinateness – that is, the relations that characterize the economic system are sufficiently comprehensive to determine the magnitudes of its variables – and the more specific idea of a balance of opposing forces” (Arrow, 1968, p. 376).  
 
The idea of a balance of forces tends to be the most commonly referred and intuitive aspect of the equilibrium notion.  
 
This conceptualization is commonly likened (though not always) to the idea of a pendulum – where adjustment is undertaken toward the original position will follow the application of a push (Myrdal, 1958, p. 198).  
 
However, while equilibrium may be viewed as a point where there is no endogenous tendency to change (as in stationary or steady states), we may also think of it as an outcome to which economic processes are continually tending towards. This is the idea that competitive processes lead to determinate outcomes.  
 
The economics of the twentieth century was dominated by the drive to prove the existence, uniqueness and stability of General Equilibrium.