General equilibrium is a cornerstone of economic theory

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The so-called theory of general equilibrium (including the many variants) is a cornerstone of economic theory, occupying economists' minds since (at least) the 1800s. Although, like other concepts in economics, different schools of economic thought remain polarised about its usefulness (both empirically and theoretically) and its falsifiability, [see Sonnenschein Mantel Debreu theorem (1976), positive corner-case results of Brown and Matzkin (1996) and any one of a number of further negative results Nachbar (2004), Kirman (1992), Carvajal (2003),...].

Post Blanchard's now famous 2008 declaration that "the state of macro is....good" and the characterization of DSGEs as state-of-the-art. What is the state of GE theories today?

Reference no: EM13769451

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