Microeconomic Theory Old and New: A Student's Guide has two main goals. The first is to give advanced undergraduate and graduate students an understanding of the core model of economics: Walrasian general equilibrium theory. The text presents in detail the three building blocks of Walrasian theory—establishing Pareto efficiency in a barter economy, establishing the efficiency of competitive markets, and accounting for market failure. Each is discussed verbally, graphically, and using mathematics. After reading this book, students will have an understanding of how the seemingly disparate pieces of conventional economics fit together as a system. Although the text focuses on the intellectual framework of standard economic theory, relevant mathematical techniques are discussed.
The second goal is to present contemporary extensions and emerging alternatives to the Walrasian model. Some of the theoretical inconsistencies in the model are presented, drawing on the work of Samuelson, Boadway, Chipman and Moore, Ng, and Suzamura, among others. The text then presents challenges to the basic assumptions of the Walrasian system, posed by findings in behavioral economics and evolutionary game theory.
Understanding both the Walrasian system and the theoretical and experimental critiques of classical economics is essential to those who ultimately work within the traditional framework and to those looking for an alternative, making this a must read for all students of economics.
About the author
John M. Gowdy is the Rittenhouse Teaching Professor of Humanities and Social Science in the Department of Economics at Rensselaer Polytechnic Institute. He is President of the International Society for Ecological Economics 2010-2011. Gowdy has published nine other books, including Paradise for Sale: A Parable of Nature, co-authored with Carl McDaniel.
"This is an excellent and timely guide for students on the evolution of microeconomic theory. John Gowdy has done an outstanding job of identifying how Walrasian theory has long since outlived its usefulness and previews where economics is, and should be, going. This is essential reading for economists of all stripes."
—Barry Solomon, Michigan Technological University