Modelling market dynamics : Jean-Pascal Bénassy, Edmond Malinvaud, and the development of disequilibrium macroeconomics
Abstract
This article deals with the place of dynamics in disequilibrium macroeconomics. It focuses on the works of Jean-Pascal Bénassy and Edmond Malinvaud. We show that both economists wanted to study the dynamics of non-clearing markets because they shared the concerns of their forerunners Don Patinkin, Robert Clower, and Axel Leijonhufvud – about the stability issue raised in Chapter 19 of The General Theory (Keynes, 1936). A novelty of their approach was the combination of John R. Hicks’s conception of dynamics as a sequence of temporary equilibria with Paul Samuelson’s defnition of dynamics as the adjustment toward one equilibrium position. This combination implied notable gains in terms of consistency with respect to Patinkin’s and Clower’s works and allowed them to address dynamics formally. The paper shows how Bénassy and Malinvaud ended up pursing distinct research agendas from the frst half of the 1980s. We also discuss the limits of their common approach to modelling dynamics.