Abstract
The present article focuses on the possible interpretation of the pi theorem of physics in the field of the economics' general equilibrium analysis. The physical units of the exchanged goods are de ned as fundamental units and the neoclassical prices as dimensionless derived numbers. Thus, the general equilibrium does not need money metrics, unspeci ed money market and the complementing inappropriate incorporation of the Walras Law. Further, the main function of money is not that of a unit of account, but a means of exchange. If such type of a money market is introduced, the Walras symmetry holds but in the sense that the positive aggregate excess demand on the goods market matches the negative excess demand on the money market. Distinction is de ned between neoclassical, relative and monetary prices. Additional conditions must be met to allow for a closed monetary circulation.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
