Economists miss the boat when they act if Arrow and Debreu’s general equilibrium model accurately describes markets in the real world of constant change. In contrast, the classical view on the market mechanism offers a helpful foundation on which to add modern insights about how markets create and coordinate information.
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Sabiou M. Inoua is predoctoral research associate in the Economic Science Institute at Chapman University.
Vernon L. Smith is a Member of the Board of Advisors for the Independent Institute and Professor of Economics at Chapman University.
| Other Independent Review articles by Vernon L. Smith | |
| Summer 2023 | Adam Smith, Sociality, and Classical Liberalism |
| Spring 2016 | Economic Modeling: Why the Standard Model Survives Bad Performance |
| Winter 2001/02 | Demand-Side Bidding Will Reduce the Level and Volatility of Electricity Prices |
