Imperfectionist Models

Abstract

The term ‘imperfectionist’ was applied by Eatwell and Milgate (1983) to those models which rely on imperfections or arbitrary constraints in order to analyse the phenomenon under consideration. In other words, an imperfectionist analysis involves the construction of a model which, when innocent of those arbitrary constraints, does not display the phenomenon. The leading species of this genus to be found in economics today are models of unemployment in which imperfections such as sticky prices, or the effects of uncertainty, are imposed on a Walrasian model, thus disrupting the Walrasian relationship between price formation and the determination of levels of output which implies clearing of the markets for endowments of factor services.