The Difference Between the Surplus and the Neoclassical Theories of General Equilibrium

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Table of Contents

Main Idea of the Author
Supporting Details of the Main Idea
Critical Judgement
Works Cited

Main Idea of the Author

The main idea of the author is to establish the difference between the surplus and the neoclassical theories of general equilibrium based on how surplus output resources are accumulated and allocated and the best options of allocating resources respectively.

The rationale is to link the role of the mathematical model of general equilibrium and the history of economic analysis in the context of economic analysis and economic thought (Walsh and Gram 1). It is crucial for researchers to demonstrate progress in economic analysis to justify the argument in favor of equilibrium between economic analysis and progress in economic thought.

Supporting Details of the Main Idea

In support of the argument on equilibrium condition of the analytical economics and neoclassical theories, historical evidence shows a sustained development in the accumulation of capital and the allocation of surplus capital, with the two concepts running together (Walsh and Gram 1).

The distinguishing differences are the accumulation and allocation of resources based on both the theories respectively (Walsh and Gram 1). To give a boost to the application of the theories in the accumulation and allocation of resources, the use of mathematical models reinforced the perspective of the neoclassical theories (Walsh and Gram 2). That led to the formulation of mathematical models.

Here, the production of commodities was demonstrated to be due to inputs as commodities, reinforcing the equilibrium argument of accumulation and allocation of resources based on both the theories (Walsh and Gram 2). A number of new authors have elaborated on the classical theory in the surplus and accumulation of capital, with modern perspectives developed on the classical theory of economics.

Supporting the argument on the balance between the neoclassical and surplus theories of accumulation and allocation of resources, a strong argument and analysis has been developed in the context that the classical theory has simply evolved into the modern form of neoclassical theory of economics (Walsh and Gram 2).

Therefore, a combination of an evolution in the thinking and the application of the economic theories and the perspectives developed shows that different combinations of thinking have contributed to different perspectives.

That includes the use of mathematical models to demonstrate the fundamental differences between the models. The evolution in the thinking of economists with time showed a significant change of theme in economic analysis. It, however, does not draw a distinction; when the neoclassical economic theory emerged, the rise of the concept of utility, which was not a component of the previous theories of the accumulation and allocation of capital (Walsh and Gram 3).

Critical Judgement

Drawing on the above arguments, the allocation of resources is based on the best alternatives, which define the general equilibrium models with the input resources, where the inputs are service factors with the classical argument classifying inputs and produced commodities. The origin of the economic models and the theme of their development provide clear distinctions in the context of the parameters defining their development.

Here, the ultimate is the introduction variables into the economic problem. The economic problem in this case is the changing nature of surplus and parametric variables, and how to allocate the resources in the context of capital and luxury consumption. Addressing the economic problem through the allocation of surplus resources, the modern economic models have developed from classical theories of economics through different levels of their evolution.

Works Cited

Walsh, Vivian Charles and Harvey Gram. Classical and Neoclassical Theories of General Equilibrium: Historical Origins and Mathematical Structure, New York: Wiley-Blackwell, 1980. Print.

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The Difference Between the Surplus and the Neoclassical Theories of General Equilibrium

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