Lecture 2 - Utilities, Endowments, and Equilibrium

Financial Theory

Yale

This lecture explains what an economic model is, and why it allows for counterfactual reasoning and often yields paradoxical conclusions. Typically, equilibrium is defined as the solution to a system of simultaneous equations. The most important economic model is that of supply and demand in one market, which was understood to some extent by the ancient Greeks and even by Shakespeare. That model accurately fits the experiment from the last class, as well as many other markets, such as the Paris Bourse, online trading, the commodities pit, and a host of others. The modern theory of general economic equilibrium described in this lecture extends that model to continuous quantities and multiple commodities. It is the bedrock on which we will build the model of financial equilibrium in subsequent lectures.

1356 Views
SUGGESTIONS FOR YOU
Lecture 7 - Mill; Utilitarianism and Liberty

Foundations of Modern Social Theory

Yale

Lecture 4 - Gender and Sexuality

The Victorians: Culture and Experience in Britain, Europe and the World 1815 to 1914

Gresham College

Lecture 23 - Equity and Efficiency

Principles of Microeconomics

MIT