Abstract
The notion of long-run and short-run equilibrium was introduced by Marshall in 1890 and reflected the ‘long-period method’ of analysis in use among classical political economists since the 18th century. In the early 1930s, dissatisfaction with some of the neoclassical conclusions led to a shift to different methods of analysis and to the introduction of new equilibrium notions. These changes, together with the tendency to use old terminology for new equilibrium concepts, have deprived the terms ‘short-period’ and ‘long-period’ of a uniform meaning and have been a source of confusion and misunderstandings in recent debates on theoretical and applied work.
Keywords
- Average interest rate
- Capital endowment
- Circulating capital
- Diminishing marginal returns
- Effective demand
- Fixed capital
- General equilibrium
- Intertemporal equilibria
- Keynes, J. M.
- Long-period method
- Long-run and short-run
- Market price
- Marshall, A.
- Marx, K. H.
- Natural price
- Natural rate and market rate of interest
- Partial equilibrium
- Secular equilibrium
- Short-run and long-run equilibrium
- Stationary equilibria
- Stationary state
- Supply and demand
- Temporary equilibrium
- Underemployment equilibrium
- Value and distribution, neoclassical theory of
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Panico, C., Petri, F. (2018). Long Run and Short Run. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1074
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DOI: https://doi.org/10.1057/978-1-349-95189-5_1074
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