Abstract
Walras’s Law (so named by Lange, 1942) is an expression of the interdependence among the excess-demand equations of a general-equilibrium system that stems from the budget constraint. Its name reflects the fact that Walras, the father of general-equilibrium economics, himself made use of this interdependence from the first edition of his Eléments d’économie politique pure (1874, §122) through the fourth (1900, §116), which edition is for all practical purposes identical with the definitive one (1926). I have cited §116 of this edition because it is the one cited by Lange (1942, p. 51, n.2), though in a broader context than Walras’s own discussion there (see below). In this section, Walras presents the argument for an exchange economy. In accordance with his usual expository technique (cf. his treatment of the tâtonnement), he repeats the argument as he successively extends his analysis to deal first with a simple production economy and then with one in which capital formation also takes place (ibid., §§206 and 250, respectively.)
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Patinkin, D. (1989). Walras’s Law. In: Eatwell, J., Milgate, M., Newman, P. (eds) General Equilibrium. The New Palgrave. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-19802-3_37
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